History test

Definition of Economics

• Study of how ppl use scarce resources 2 satisfy wants

• Inputs can be transformed into goods/services

• Highest valued alt given up as a result of making a choice

• Encourages diff behaviors/choices

Def of Resources

• Items/resources you must have 2 live

• Items/services wanted but can live w/o

• Encourages diff behavior/choices

• Inputs transformed in2 good/service

Scarcity

• Focus on producing goods/services within limited area if expertise

• Condition btwn unlimited wants/needs + the limited resources available 2 satisfy them, requiring choices 2 b made

• Buyers/sellers willingly trading goods, services, effort, money with expectation of being better off than before

• Encourages diff behaviors/choices

Opportunity Cost

• Inputs transformed in2 goods/services

• Making rational choices by weighing benefits/costs, including opportunity cost

• Highest valued alt given up bc of a choice

• Study how ppl use scarce resources 2 satisfy wants.

Incentives

• Encourages diff behaviors/choices

• Inputs transformed in2 goods/services

• Condition btwn unlimited wants/needs and the limited resources available 2 satisfy them, requiring choices

• Items/services you must have in order to live

Economic Reasoning

• Making rational choices by weighing benefits/costs, including opportunity cost

  
  

• Focus on producing goods/services within limited area of expertise

• Condition btwn unlimited wants/needs + the limited resources available 2 satisfy them, requiring choices 2 b made

• Items/resources you must have 2 live

Needs

• Condition btwn unlimited wants/needs + the limited resources available 2 satisfy them, requiring choices 2 b made

• Study of how ppl use scarce resources 2 satisfy wants

• Items/services wanted but can live w/o

• Items/resources you must have 2 live

Wants

• Items/resources you must have 2 live

• Making rational choices by weighing benefits/costs, including opportunity cost

• Items/services desired but can live w/o

• Buyers/sellers willingly trading goods, services, effort, money with expectation of being better off than before

Voluntary Exchange

• Making rational choices by weighing benefits/costs, including opportunity cost

• Condition btwn unlimited wants/needs + the limited resources

• Encourages diff behaviors/choices

• Buyers/sellers willingly trading goods, services, effort, money with expectation of being better off than before

Specialization

• Highest valued alt given up as a result of making a choice

• Focus on producing goods/services within limited area of expertise

• Study of how ppl use scarce resources 2 satisfy wants

• Making rational choices by weighing benefits/costs, including opportunity cost