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Chapter 2 Terms


Production Possibilites Model a factor of production that has been produced for use in the production of other goods and services
Economic System set of rules that define how an economy’s resources are to be owned and how decisions are to be made.
Factors of Production human effort that can be applied to the production of goods and services
Utility knowledge that can be applied to the production of goods and services
Labor the resources of nature that can be used for the production of goods and services
Human Capital person who assumes various risks in the hopes of earning profits by finding new ways to organize factors of production
Capital skills a worker has as a result of education, training, or experience that can be used in production
Natural Resources shows the goods and services that an economy is capable of producing
Technology resources available to the economy for the production of goods and services
Entrepreneur value, or satisfaction, that people derive from the goods and services they consume

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