goods — Physical articles that have been produced for sale or use. Three examples are food, clothing, and cars.

services — Work done by someone else for which a consumer, business, or government is willing to pay. Three examples are teaching, gardening, and childcare.

factors of production — The resources used to produce goods and services. Economists define these resources as land, labor, and capital.

entrepreneurship — The willingness and ability to take the risks involved in starting and managing a business.

capital — The tools, machines, and buildings used to produce goods and services.

productivity — A measure of the efficiency with which goods and services are produced. Productivity is often stated as the quantity produced per person per hour.

opportunity cost — The value of the next best alternative that is given up when making a choice. This is the measure of what you must give up to get what you most want.

production possibilities frontier (PPF) — A simple model of an economy that shows all the combinations of two goods that can be produced with the resources and technology currently available.

Chapter Sections

2.1 – Introduction
2.2 – Why Is What We Want Scarce?
2.3 – How Do We Satisfy Economic Wants?
2.4 – What Do We Give Up When We Make a Choice?
2.5 – How Can We Measure What We Gain and Lose When Making Choices?

Chapter 2 - Textbook Scan