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16 Cards in this Set
- Front
- Back
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Communist System |
State owns the means of production and manages the economy |
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Economics |
The study of how best to allocate scarce resources among competing uses. |
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Opportunity Cost |
The most desired good and services that are forgone in order to obtain something else. |
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Factors of production |
Resource inputs used to produce goods and services (land, labor, capital, entrepreneurship) |
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Scarcity |
Lack of enough resources to satisfy all desired uses of those resources |
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Production Possibilities |
The alternative combinations of goods and services that could be produced in a given time period with all available resources and technology. |
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Investment |
Expenditures on (production of) new plant and equipment (capital) in a given time period, plus changes in business and inventories. |
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Economic growth |
An increase in output (real GDP): an expansion of production possibilities. |
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Market mechnism |
The use of market prices and sales to signal desired outputs (or resource allocations). |
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Laissez faire |
The doctrine of "leave it alone" of nonintervention by government in the market mechanism. |
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Mixed economy |
An economy that uses both market and non-market signals to allocate goods and resources. |
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Market failure |
A situation in which the market mechanism generates suboptimal economic outcomes. |
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Government failure |
Government intervention that fails to improve economic outcomes. |
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Macroeconomics |
The study of aggregate economic behavior, of the economy as a whole. |
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Microeconomics |
The study of individual behavior in the economy, of the components of the larger economy. |
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Ceteris paribus |
The assumption that nothing else changes. |
