Economics Vocabulary Latest Update 100% Correct

Economics Vocabulary Latest Update 100% Correct Scarcity The resources we use to produce goods and services are limited. Economics The study of choices when there is scarcity. Factors of Production The resources used to produce goods and services; also known as production inputs or resources Natural Resources Resources provided by nature and used to produce goods and services. Labor Human effort, including both physical and mental effort, used to produce goods and services. Physical Capital The stock of equipment, machines, structures, and infrastructure that if used to produce goods and services. Human Capital The knowledge and skills acquired by a worker through education and experience and used to produce goods and services. Entrepreneurship The effort used to coordinate the factors of production--natural resources, labor, physical capital, and human capital--to produce and sell products. Positive Analysis Answers the question "What is?" or "What will be?" Normative Analysis Answers the question "What ought to be?" Economic Model A simplified representation of an economic environment, often employing a graph. Variable A measure of something that can take on different values. Ceteris Paribus The Latin expression meaning that the other variables are held fixed. Marginal Change A small, one-unit change in value. Macroeconomics The study of the nation's economy as a whole; focuses on the issues of inflation,umemployment, and economic growth. Microeconomics The study of choices made by households, firms, and government and how these choices affect the markets for goods and services. Positive Relationship A relationship in which two variables move in the same direction. Negative Relationship A relationship in which two variables move in the opposite direction. Slope of a Curve The vertical difference between the two points (the rise) divided by the horizontal difference (the run). Opportunity Cost What you sacrifice to get something. Production Possibilities Curve A curve that shows the possible combinations of products that an economy can produce, given that its productive resources are fully employed and efficiently used. Marginal Benefit The additional benefit resulting from a small increase in some activity. Marginal Cost The additional cost resulting from small increase in some activity. Nominal Value The face value of an amount of money