Basic Microeconomics Concepts 1
Economics - answersthe study of how society manages its scarce resources
Scarcity - answersA situation in which unlimited wants exceed the limited resources
available to fulfill those wants
Positive Economics - answersthe branch of economic analysis that describes the way
the economy actually works
Normative economics - answersmakes prescriptions about the way the economy should
work
Resources - answersall things used in producing goods and services
inputs - answersthe resources—such as labor, money, materials, and energy—that are
converted into outputs
factors of production - answersLand, labor, and capital; the three groups of resources
that are used to make all goods and services
labor - answersHuman effort directed toward producing goods and services
human capital - answersthe skills and knowledge gained by a worker through education
and experience
physical capital - answersthe human-made objects used to create other goods and
services
Economics - answersthe study of how society manages its scarce resources
Scarcity - answersA situation in which unlimited wants exceed the limited resources
available to fulfill those wants
Positive Economics - answersthe branch of economic analysis that describes the way
the economy actually works
Normative economics - answersmakes prescriptions about the way the economy should
work
Resources - answersall things used in producing goods and services
inputs - answersthe resources—such as labor, money, materials, and energy—that are
converted into outputs
factors of production - answersLand, labor, and capital; the three groups of resources
that are used to make all goods and services
labor - answersHuman effort directed toward producing goods and services
human capital - answersthe skills and knowledge gained by a worker through education
and experience
physical capital - answersthe human-made objects used to create other goods and
services
