Test Review 1: Econ 2005 Chapter 1 – – – – – – Wants and desires are unlimited, but the resources to satisfy these wants are scare Scarce: when a resource is not freely available, when the price exceeds zero Economics: examines how people use their scarce resources to satisfy their unlimited wants Resources: inputs or factors of production, used to produce the goods and services that people want Labor: human effort, both physical and mental, comes from time we sell our time as labor rather than spending it doing something else Capital: all human creations used to produce goods and services ○ Physical- consists of factories, tools, machines, computers, buildings, airports, highways, and other human creations used to produce goods and services ○ Human- knowledge and skill people acquire to increase their productivity Natural Resources: gifts of nature, water, trees, oil reserves, animals, etc. ○ Renewable: trees, air, water ○ Exhaustible: oil, coal, copper Entrepreneur: requires the talent t...