Economic Terms
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Economic Terms. There are some basic economic terms that we need to be aware of before we can learn about the economy. Wants. Things we desire to have. Goods. Physical products. Services. Products you can’t touch. Scarcity. The result of an inability to satisfy all of everyone’s wants

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Economic Terms

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Economic terms

Economic Terms


Economic terms

  • There are some basic economic terms that we need to be aware of before we can learn about the economy.


Wants

Wants

Things we desire to have


Goods

Goods

Physical products


Services

Services

Products you can’t touch


Scarcity

Scarcity

The result of an inability to satisfy all of everyone’s wants

EVERYTHING IS SCARCE


Choices

Choices

  • We can’t have everything we want

  • Therefore, we must choose what we get


Opportunity costs

Opportunity Costs

The best alternative given up when making a decision


Rationing device

Rationing Device

A means for deciding who gets what portion of the available goods and services


Economics

Economics

Studies the choices of people trying to satisfy their wants in a world of scarcity


Exchanging

Exchanging

Giving one thing for another (e.g. $ for food)


Market

Market

Whenever and wherever people voluntarily make exchanges with one another


Economic terms

Economic Concepts


Economic terms

These concepts are the basis for our study of the economy


Trade offs

Trade-offs

Giving up some of one thing in order to get more of another


Unintended effects

Unintended Effects

  • Taking action to solve one problem results in something unrelated to occur.

  • Example: raising the price on a pair of shoes to earn more money and ending up selling fewer shoes and actually losing money


Global economy

Global Economy

Economic actions taken anywhere in the world may affect an individual’s standard of living


Microeconomics

Microeconomics

Studies the individual or a single business in the economy


Macroeconomics

Macroeconomics

Studies the economy as a whole


Factors of production

Factors of Production

  • Natural resources

  • Human resources

  • Capital

  • Entrepeneurship


Economic questions

Economic Questions

  • What goods will be produced?

  • How will the goods be produced?

  • For whom will the goods be produced?


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