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21 Cards in this Set
- Front
- Back
Economics
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The study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants
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Wants
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Things we would like to have, such as entertainment, vacations, and items that make life comfortable and enjoyable
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Needs
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Requirements for survival, such as food, clothing, and shelter
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Scarcity
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Not having enough resources to produce all of the things we would like to have
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Economic Models
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Simplified representation of the real world that economists develop to describe how the economy behaves and is expected to perform in the future
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Trade-off
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The alternative you face if you decide to do one thing rather than another
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Opportunity Cost
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The cost of the next best alternative use of time and money when choosing to do one thing rather than another
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Fixed Costs
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Costs that stay the same no matter how many units of a good are produced
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Variable Costs
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Expenses that change with the number of products produced
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Total Costs
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VC+FC= this
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Marginal Costs
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The additional or extra opportunity cost associated with an action
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Rational Choice
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Choosing the alternative that has the greatest value from among comparable-quality products
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Macroeconomics
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Division of econmics that deals with the big picture
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Microeconomics
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Division of economics where economists look at the small picture
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Services
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Work performed by a person for someone else
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Goods
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Tangible products that we use to satisfy our wants and needs
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Factors of Production
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Resources necessary to produce goods and services; Natural Resources, Labor, Capital, and Entrepreneurs
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Natural Resources
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Gifts of nature that make production possible
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Marginal Revenue
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The change or extra revenue that results from selling one more unit of output
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Marginal Benefit
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The additional or extra benefit associated with an action
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Cost-Benefit Analysis
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Economic model that compares the marginal costs and marginal benefits of a decision
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