Chapter 1 - Limits Alternatives And Choices

Front 1

facing tradeoffs

Back 1

Scarcity in relation to wants means you face tradeoffs, therefore, you make choices. the sacrifice of some or all economic goal, good, o service to achieve some other goal, good, or service.

Front 2

opportunity costs

Back 2

the amount of other products that must be forgone or sacrificed to produce a unit of a product

Front 3

Choosing a little more or less

Back 3

choices are usually made at the margins

Front 4

the influence of incentives

Back 4

the choices you make are influenced by incentives

Front 5

specialization and trade

Back 5

specialization and trade will improve the well-being of all particpants

Front 6

the effectiveness of the markets

Back 6

markets usually do a good job of coordinating trade among individuals, groups, and nations

Front 7

the role of governments

Back 7

governments can occasionally improve the coordinating functions of markets

Front 8

production of the standard of living

Back 8

the standard of living of the average person in a particular country is dependent on its production of goods and services. A rise in standard of living requires a rise in the output of goods and services

Front 9

money and inflation

Back 9

if the monetary authorities of a country annually print money in excess of the growth of output of goods and services, this will eventually lead to inflation

Front 10

economic perspective

Back 10

a viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with those actions.

Front 11

utility

Back 11

the satisfaction a person gets from consuming a good or service

Front 12

marginal analysis

Back 12

the comparison of marginal, extra or additional, benefits an marginal costs, usually for decision making.

Front 13

economic principle

Back 13

a statement about economic behavior or the economy that makes it possible to predict the probable effects of certain actions.

Front 14

generalizations

Back 14

statements of the nature of the relation between two or more sets of facts

Front 15

microeconomics

Back 15

the part of econ concerned with such individual units as industries, firms, and households

Front 16

macroeconomics

Back 16

the part of econ concerned with the economy as a whole.

Front 17

aggregate

Back 17

a collection of specific economic units treated as of they were one unit

Front 18

positive economics

Back 18

the analysis of facts to establish cause-and-effect relationships. "What is"

Front 19

normative economics

Back 19

the part of economics involving value judgments about what the economy should be

Front 20

budget line

Back 20

a schedule or curve that shows various combinations of two products a consumer can purchase with a specific income

Front 21

economic resources

Back 21

the land, labor, capital, and entrepreneurial ability that are used in the production of goods and services

Front 22

consumer goods

Back 22

products and services that satisfy human wants directly

Front 23

factors of production

Back 23

economic resources: land, labor, capital, and entrepreneurial ability

Front 24

production possibilities table

Back 24

a table showing the different combinations of two products that can be produced with specific sets of resources in a full employment, full production economy

Front 25

production possibilities curve

Back 25

a curve showing the different combinations of goods or services that can be produced at full employment, full production economy where the available supplies of resources and technology are fixed

Front 26

law of increasing opportunity costs

Back 26

as the production of a good increases, the opportunity cost of producing an additional unit rises

Front 27

full production

Back 27

employment of available resources so that the maximum amount of goods and services is produced

Front 28

economic growth

Back 28

an outward shift in the production possibilities curve that results from an increase in factor supplies or quality, or an improvement in technology

Front 29

direct relationship

Back 29

the (positive) relationship between two variables that change in the same, for example, price and supply.

Front 30

inverse relationship

Back 30

the (negative) relationship between two variables that change in opposite directions, for example, price and demand.

Front 31

independent variables

Back 31

the variable causing a change in some other (dependent) variable.

Front 32

dependent variable

Back 32

a variable that changes as a consequence of a change in some other (independent) variable: the "effect" or outcome.