Scarcity [image][image]

A condition facing all societies because there are not enough productive resources to satisfy people's unlinited wants. Not all of societies goals can be satisfied at a particular time. When products become scarce, people begin to look for different alternatives.

Ex: water

Human Capital [image]

The stock of competencies, knowledge, social and personality attributes embodied in the ability to perform labor so as to produe economic value. It's an aggregate economic value of the human being acting within economies, which is an attempt to capture the social, biological, cultural, and pyschological complexity as they interact in explicit and/or economic transactions.

Ex: education, health

Human Resources [image]

The broad category of human efforts, both physicl and mental, used to produce goods and services. Labor is the most important of the human resources. If a person is not working or making use of their time, they are selling their time for no wage. 

Ex: Cab driver, doctor

Productive Resources [image]

Resources that are used to produce the goods and services that enable societies to survive and prosper. It is sorted into 3 categories: juman resources, natural resources, and capital goods. They are the starting point of production process. 

Ex: all land, resources, labor, capital, technology used in production

Labor [image]

The physical and mental effort used to produce goods and services. It comes from time, a more fundamental human resource. Labor trades time for a wage.

Ex: driver

Entrepreneur [image]

A profitseeker who develops a new product or process and assumes the risk of profit or loss. They seek to discover profitable oppurtunities by purchasing resources. Profit equals the revenue from sales minus the cost of production. 

Ex: the people that created the products in informercials

Natural Resources [image]

So-called "gifts of nature" used to produce goods and services. They can be divided into renewable resources and exhaustible resources. Renewable resource can be drawn on indefinitely if used wisely, while an exhaustible resource does not renew itself and is available in a limited amount. 

Ex: land, forests, minerals, oil reserves, bodies of water

Capital Goods [image]

All human creations used to produce goods and service. Usually heavy machinery which require a relatively large investment and a brought to be used over the course of years. They are used to finish products.

Ex: tools, machines, computers

Good [image][image]

An item you can see, feel, and touch that requires scarce resources to produce and satisfies human wants. They are usually tangible. Goods may be increase or decrease their utility directly or indirectly and can have marginal utility.

Ex: corn 

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Service[image]

Something not physical that requires scarce resources to produce and satisfies human wants. Service providers participate in an economy without the restrictions of carrying inventory or the need to concern themselves with bulky raw materials. Their investment in expertise requires marketing and upgrading to beat competition

Ex: an orchestra

Markets[image]

It is one of the varieties of systems, institutions, procedures, social relations and infrastructures where parties engage in exchange. It takes at least three persons to have a market, so that there is competition. A market is the process by which the prices of goods and services are established. 

Ex: The US.

Marginal Analysis [image]

Making choices involves making decisions 'at the margin' or based on small changes in resources. Focusin on the efect of a marginl adjustment to the status quo cuts the analysis of economic choice down to a manageable size. It can begin with marginal choice and then show how that choice affectss a particular market and shapes the economy as a whole.

Ex: What additional output does a family business produce when it hires one more worker?

Microeconomics [image]

It is the study of economic behavior in particular markets. It examines the factors that influence individual economic choices and how markets coordinate the choices of various decision makers. It examines how these decisions and behaviors affect the supply and demand for goods an services, which determines prices, and how prices determine the quantity supplied and quantity demanded of goods and services. 

Ex: market for breakfast cereal

Macroeconomics [image]

It is the study of the economic behavior of the economy as a whole, especially the national economy. It deals with the performance, structure, behavior, and decision-making of an economy. It develops models that explain the relationship between factors like national income, output, inflation, etc. 

Ex: what influences employment and unemployment

Opportunity Cost[image]

The value of the best alternative passed up for the chosen item or activity. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would be had by taking the second best choice available. It is the basic relationship between scarcity and choice.

Ex: picking between two different classes

Sunk Cost [image]

A cost you have already paid and connot recover, regardless of what you do now. Economic decision makers should avoid sunk costs and consider only those costs that are affected by their choice. What you do now cannot change the fact.

Ex: "There's no sense in crying over spilt milk."

Circular Flow [image]

It refers to a simple economic model which describes the reciprocal circulation of income between producers and consumers. It involves two basic assumptions: 1) in any exchange process, the seller or producer receives the same amount what buyer or consumer spends; 2) goods and services flow in one direction and money payment to get these flow in return direction, causes the circular flow. It is classified as: Real flow and money flow. 

Ex: produce

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Business Flow [image]

It is the process in which tasks in a business take place from start to finish ensuring objectives and goals of the company are met. It allows employers and employees the knowledge needed for understanding the business proess of the company they work or run. The diagram outlines the order of tasks within the business and the departments responsible for the task

Ex: [image]