AP Microeconomics Module 1 Flashcards

4796382543	Scarcity	A condition that exists when there are insufficient resources to satisfy unlimited wants.	0
4796382544	Opportunity cost	The true cost of something including what is given up to get it.	1
4796382545	Factors of production	Land, labor, and capital.	2
4796382546	land	Naturally occurring resource	3
4796382547	labor	Human effort in the production process.	4
4796382548	capital	Value of all assets; including money, equipment, buildings, tools, inventory. Capital can be classified into two categories: financial capital, which includes monies to pay for ventures and physical capital, which includes buildings and equipment.	5
4796382549	Entrepreneurship	Risk taking by business firms and individuals. defined as the skill and ability to effectively manage all of your resources.	6
4796382550	Property Rights	A system in which valuable items in the economy have specific owners who can dispose of them as they choose.	7
4796382551	Role of incentives	The possibility of person gain; what motivates people to be involved in the market system and is a major contributor of efficiency in a market economy.	8
4796382552	Law of diminishing marginal returns	When increasing amounts of a variable factor of production are employed in production along with a fixed production factor, after some point the amount produced will diminish.	9
4796382553	Four basic economic questions	What goods will be produced? How will resources be used in the production process? Who will receive the goods? When will production occur?	10
4796382554	Production possibilities curve (PPC)	The graphical representation of the combinations of two goods and/or services that can be produced by an economy when using resources efficiently.	11
4796382555	Production Possibilities frontier (PPF)	The graphical representation of the combination of two goods and/or services that ca be produced by an economy when using resources efficiently.	12
4796382556	Trade-off	The act of giving up one thing to have more of another thing.	13
4796382557	Economic Growth	Changes in the total output of a nation over time as a result of increased production.	14
4796382558	Inefficiency	The waste that stems from the unproductive use of resources.	15
4796382559	Market Economy		16