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1. Economics Vocabulary Chapter 1 -1
4 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.

2. 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.

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

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

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

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

7. 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.

8. 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

9. 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

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

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

12. 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

13. 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)