Economics Vocabulary Chapter Factors of Production  Human Resources – any human effort exerted during production. The effort can be either physical or intellectual.  Capital Resources – manufactured materials used to create products. This includes capital goods and the money used to purchase them.  Natural Resources – items provided by nature that can be used to produce goods and to provide services. Can be found on or in Earth or in the Earth’s atmosphere.

Economics Chapter 1-2 Factors of Production  Entrepreneurship – the combination of organizational abilities and risk taking involved in starting a new business or introducing a new product.  Entrepreneur – a person who attempts to start a new business or introduce a new product – risking economic failure in return for the possibility of financial gain.

Economics Chapter 1-2  Capital Goods – manufactured resources that are used in making finished products  Consumer goods – the goods and services that people buy.

Economics Chapter 1-2  Technology – the use of technical knowledge and methods to create new products or make existing products more efficiently.

Economics Chapter 1 Section 2  Scarcity is a condition caused by the combination of limited economic resources and unlimited human wants

Economics Chapter 1-2  Allocate – to distribute resources in order to satisfy the greatest number of needs and wants.

Economics Chapter 1-2  Productivity – is the level of output that results from a given level of input.  Efficiency is the use of the smallest amount of resources to produce the greatest amount of output.

Economics Chapter 1-2  Division of labor assigning a small number of tasks to each worker.  Specialization – the focus on one activity, usually determined by who produces toe fastest or greatest number

Economics Chapter 1-2 Scarcity the three basic economic question that individuals, businesses, and societies must address when deciding how best to allocate scarce resources  What to produce  How to produce  for whom to produce

Economics Vocabulary Chapter 1 Section 3  opportunity cost – the value of the next best alternative that is given up to obtain the preferred item

Economics Vocabulary Chapter 1 Section 3  Trade-off/Alternative – choosing among alternative uses for available resources  Criteria – What is the goal

Economics Vocabulary Chapter 1 Section 4  exchange – producers and consumers agree to provide one type of item on return for another  Barter – direct trade of one set of good for another  money – type of exchange that is used instead of bartering (always trading the same thing)  Credit – Promise to Pay money for goods or services

Economics Vocabulary Chapter 1 Section 4 3 Types of Exchanges  Barter – direct trade of one set of good for another  money – type of exchange that is used instead of bartering (always trading the same thing) (indirect)  Credit – Promise to Pay money for goods or services (indirect)