Economics Final Exam
Economics
the study of how people seek to satisfy their needs and wants by making choices
Horizontal Merger
the combination of two or more firms competing in the same market with the same good
or service
Vertical Merger
the combination of two or more firms involved in different stages of producing the same
good or service
Shortage
a situation in which a good or service is unavailable
Scarcity
limited quantities of resources to meet unlimited wants
Factors of Production
land, labor, and capital; the three groups of resources that are used to make all goods
and services
Entrepreneur
ambitious leader who combines land, labor, and capital to create and market new goods
or services
Trade-Off
the alternative we sacrifice when we make a decision
Opportunity Cost
the most desirable alternative given up as the result of a decision
Human Capital
the skills and knowledge gained by a worker through education and experience
Physical Capital
all human-made goods that are used to produce other goods and services; tools and
buildings
Thinking at the Margin
deciding whether to do or use one additional unit of some resource
Production Possibility Graph
a graph that shows alternative ways to use an economy's resources
Production Possibility Frontier
the line on a production possibilities graph that shows the maximum possible output for
a specific economy
Adam Smith
classic economist that believed the market could regulate itself
Classical Economics
the idea that free markets can regulate themselves
Free Market
individuals and privately owned businesses own the factors of production and therefore,
make what they want and buy what they want
Economics
the study of how people seek to satisfy their needs and wants by making choices
Horizontal Merger
the combination of two or more firms competing in the same market with the same good
or service
Vertical Merger
the combination of two or more firms involved in different stages of producing the same
good or service
Shortage
a situation in which a good or service is unavailable
Scarcity
limited quantities of resources to meet unlimited wants
Factors of Production
land, labor, and capital; the three groups of resources that are used to make all goods
and services
Entrepreneur
ambitious leader who combines land, labor, and capital to create and market new goods
or services
Trade-Off
the alternative we sacrifice when we make a decision
Opportunity Cost
the most desirable alternative given up as the result of a decision
Human Capital
the skills and knowledge gained by a worker through education and experience
Physical Capital
all human-made goods that are used to produce other goods and services; tools and
buildings
Thinking at the Margin
deciding whether to do or use one additional unit of some resource
Production Possibility Graph
a graph that shows alternative ways to use an economy's resources
Production Possibility Frontier
the line on a production possibilities graph that shows the maximum possible output for
a specific economy
Adam Smith
classic economist that believed the market could regulate itself
Classical Economics
the idea that free markets can regulate themselves
Free Market
individuals and privately owned businesses own the factors of production and therefore,
make what they want and buy what they want
