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Economics Test 1 Study Guide (scored 92%)

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ECON 2000
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Economics Test 1Economics Study of choice under conditions of scarcityScarcity Situation in which the amount of something available is insufficient to satisfy the desire for somethingWorld is full of LIMITED resources UNLIMITED desiresOpportunity Cost Whats given up when taking an action or making a choice EXPLICIT COSTS Dollars sacrificedand actually paid outfor a choice IMPLICIT COSTS Value of some sacrificed with no direct payment OPPORTUNITY COST OF A CHOICE Explicit CostsImplicit Costs Ex Opportunity cost of CollegeEXPLICIT COSTS Tuition fees books suppliesIMPLICIT COSTS Forgone incomeOpportunity Cost and Societies Trade OffFor the SOCIETY Opportunity cost arises from the scarcity of resources Virtually all productionOpportunity CostProduce more of one thingSociety shifts resources away from producing something elseTHE FOUR RESOURCES LABORTime people spend producing goodsservices CAPITALLonglasting tool to produce other goodsPhysical CapitalPhysical goods ex Machinery equipment factoriesHuman Capital Skills and training for the labor forceCapital stockTotal amount of capital in the nationProductively useful at a particular point in time LANDPhysical space that production takes placeNatural resources that come with it ENTREPRENUERSHIPAbility and willingness to combine the other resources into a productive enterpriseINPUT Anything used to produce a good for serviceWORLD OF ECONOMICS MICROECONOMICSBehavior of INDIVIDUAL households firms
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