Economics DEFINITIONS Latest 2023 Graded A

Economics DEFINITIONS Latest 2023 Graded A economics the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants consumer someone who buys a good or service needs requirements for survival, such as food, clothing, and shelter wants things we would like to have, such as entertainment, vacations, items that make life comfortable and enjoyable scarcity not having enough resources to produce all of the things we would like to have trade-offs the alternatives you face if you decide to do one thing rather than another opportunity costs the cost of the next best alternative use of time and money when choosing to do one thing rather than another variable cost cost that changes (rises or falls) depending on how much is produced fixed cost a cost that does not change, no matter how much of a good is produced total cost the sum of fixed cost and variable cost marginal cost the cost of producing one more unit of a good marginal revenue the additional income from selling one more unit of a good; sometimes equal to price marginal benefit the additional or extra opportunity cost associated with an action cost benefit analysis economic model that compares the marginal costs and marginal benefits of a decision means of production the resources (lands, tools, equipment, factories, transportation, and labor) essential to the production and distribution of goods and services capital previously manufactured goods used to make other goods and services labor human effort directed toward producing goods and services land/natural resources gifts of nature that make production possible entrepreneurs individuals who start new businesses, introduce new products, and improve management techniques capital goods buildings, tools, machines, and other equipment that are used to produce other goods but do not directly satisfy human wants. division of labor (assembly line) the breaking down of a job into separate, smaller tasks to be performed individually specialization when people, businesses, regions, and/or nations concentrate on goods and services that they can produce better than anyone else circular flow of economic activity the economic relationships that exist between different economic groups in an economy factor markets the markets where productive resources are bought and sold product markets markets where producers offer goods and services for sale consumer sector largest part of economy; made up of households business sector consists of all the private business firms and is the major producer of final goods and services. government sector the economic activity of the federal government, the state governments, and all local governments. foreign sector consists of entities located outside the borders of the United States capitalism a system in which private citizens own most, if not all, of the means of production and decide how to use them within legislated limits free enterprise system economic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference traditional economy an economic system in which the decisions of what, how, and for whom to produce are based on custom or habit command economy an economic system in which the major economic decisions are made by the central government market economy an economic system in which individuals own the factors of production and make economic decisions through free interaction mixed economy an economic system combining characteristics of more than one type of economy trade-offs the alternative you face if you decide to do one thing rather than another money Trade off decisions do not involve ...................... opportunity cost the cost of the next best use of your time or money when you choose to do one thing rather than another money Opportunity costs include more than just ..................... total cost fixed cost + variable cost total revenue quantity x price marginal revenue the price of one additional product marginal cost ... profit total revenue - total costs what?; how?; for whom? What are the three basic economic questions?