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Unit 7 Vocab

Unit 7 Vocab. Scarcity. Unlimited wants with limited resources Fundamental economic problem facing all societies. Want. Things we would like to have. Need. Requirement for survival. Economics.

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Unit 7 Vocab

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  1. Unit 7 Vocab

  2. Scarcity Unlimited wants with limited resources Fundamental economic problem facing all societies
  3. Want Things we would like to have
  4. Need Requirement for survival
  5. Economics The study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants
  6. 4 Factors of Production Inputs to the production process; commodities or services used to produce other goods/services Land Labor Capital Entrepreneurship
  7. Land anything used from nature
  8. Labor Human effort directed towards producing a good or service
  9. Capital Previously manufactured goods used to make a good or service Human Capital: Investment in training and further education to increase productivity
  10. Entrepreneurship Skills to start a new business, create a product, or improve management Skills to efficiently combine the other 3 factors of production
  11. Consumer Someone who buys a good or service
  12. Consumer Goods Goods or services created for consumption by people
  13. Producer Someone who makes a good or provides a service
  14. Trade Off The process of giving up something to gain something
  15. Opportunity Cost The cost of the next best alternative use of time and money when choosing to do one thing rather than another
  16. Guns and Butter (or Ovens and Bread) Idea that countries must choose to make capital goods or consumer goods
  17. Division of Labor The breaking down of a job into separate smaller tasks to be performed individually
  18. Specialization When people, businesses, regions, and/or nations concentrate on goods and services that they can produce better than anyone else
  19. Law of Diminishing Returns Adding additional resources eventually decreases productivity
  20. Adam Smith Scottish economist who wrote The Wealth of Nations
  21. Invisible Hand Pursuing your own interests can benefit society
  22. Laissez-Faire Economic system where government should not interfere in the marketplace
  23. Capitalism Private citizens own means of production
  24. Profit Motive The driving force that encourages individuals and organizations to improve their material well-being
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