Chapters 1&2 Vocab

Front 1

The sacrifice of some or all
of one economic goal good or
service to achieve some other
goal good or service.

Back 1

Tradeoffs

Front 2

The part of economics concerned
with the economy as a whole;
with such major aggregates
as the household business
and governmental sectors;
and with measures of the total economy.
The part of economics concerned
with the economy as a whole;
with such major aggregates
as the household business
and governmental sectors;
and with measures of the total economy.

Back 2

Macroeconomics

Front 3

The analysis of facts or data to establish scientific generalizations about economic behavior.

Back 3

Positive Economics

Front 4

That part of economics involving
value judgments about what
the economy should be like; concerned with identifying
economic goals and promoting
them via public policies.

Back 4

Normative Economics

Front 5

The choices necessitated
because society’s material
wants for goods and services
are unlimited but the resources available to satisfy these wants
are limited.

Back 5

Scarcity

Front 6

The want-satisfying power
of a good or service; the
satisfaction or pleasure a
consumer obtains from the consumption of a good or
service (or from the consumption
of a collection of goods and
services).

Back 6

Utility

Front 7

The land labor capital and entrepreneurial ability which
are used in the production of
goods and services; productive agents

Back 7

Factors of Production
Economic Resources

Front 8

Human-made resources
(buildings machinery and
equipment) used to produce
goods and services; goods
which do not directly satisfy
human wants; also called
capital goods.

Back 8

Capital

Front 9

Spending for the production
and accumulation of capital
and additions to inventories.

Back 9

Investment (Ig)

Front 10

The production of a good in the
least costly way; occurs when production takes place at the
output at which average total
cost is a minimum and at
which marginal product per
dollar’s worth of input is the
same for all inputs.

Back 10

Productive Efficiency

Front 11

The apportionment of
resources among firms and
industries to obtain the
production of the products
most wanted by society
(consumers); the output of
each product at which its
marginal cost and price or
marginal benefit are equal.

Back 11

Allocative Efficiency

Front 12

A table/curve listing the
different combinations of
two products that can be
produced with a specific set
of resources.

Back 12

Productions Possibilities Curve/Table
(PPC)

Front 13

The amount of other products
which must be forgone or
sacrificed to produce a unit
of a product.

Back 13

Opportunity
Cost

Front 14

As the production of a good
increases the opportunity
cost of producing an additional
unit rises.

Back 14

Law of Increasing Opportunity Cost

Front 15

An economic system in
which property resources
are privately owned and markets
and prices are used to direct
and coordinate economic
activities

Back 15

Pure
Capitalism