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55 Cards in this Set

  • Front
  • Back
the amount of a material availible for use
the quantity that the consumers would purchase at a selected price
Gross Domestic Product
the amount paid to a lender for a loan
opportunity cost
what is lost when you choose one option over another
Aggregate demand
the total amount demanded of the economy
consumption expenditure
the amount of money spend by household consumers
investment expenditure
money spent on firms to invest in new technology, ect.
government expenditure
amount spent by government that comes from treasury
Aggregate supply
total amount produced at given prices
The decisions made by an individual consumer or company.
Ex. Midwest Airlines, Jiffy Lube
the overall economy, decisions made by a whole industry.
Ex. Airlines, Car Repair/Maintenence
at any one time, an economy has a limited power over resources, limited output
oppurtunity cost
there is a limited amount of resources so when decisions are made towards one thing, the ability to make another is gone
people try to reach a goal or become optimized naturally
implicit market
individuals work together for mutual benefit
stable preferences
humans have certain goals and preferences that they have the urge to satisfy
utility function
self, or description of what is important to a person
bounded rationality
try not to optimize but to satisfy
economy where forces of supply and demand determine goods and prices
economy where central planning committee decide goods and prices
mixed economy
mix of command and market economy
any none produced item. any item not manmade used in production
the items put into production
any previously processed item used in production
consumer goods and services produced
law of increasing relative cost
more of something produced, more it costs to produce it
trade off
give up some of one thing to get more of another
elasticity of demand
measure quanity demanded as the price changes
barter system
producer finds someone whose needs and supplies are the opposite. Person 1 has A and needs B. Person 2 has B and needs A.
demand curve
negative slope because relationship is inverse
supply curve
positive slope because of direct relationship
the amount of product produced equals amount demanded.
when demand is greater than amount produced
when amount produced is greater than demand
substitute goods
a similiar good bought when the original is priced too high
when something goes down in price and something that goes with it increase in price.
Ex. Price of tennis racket decreases but price of tennis balls increase
law of demand
the amount demand will change with a change in price
elastic change in demand
when the change in amount demanded is greater than the change in price
inelastic change in demand
when the change in price is greater than change in demand
unitaryelastic change in demand
change in price equals change in demand
only one seller with a unique product
monopolistic competition
many producers and sellers, but with slightly different products
few producers and sellers with differen or same products
total revenue
price x quantity
marginal revenue
additional revenue for each additional unit sold
Gross National Product. all goods and services produced in a year
value added approach of finding GNP
makes products=price-cost of product needed to produce them
allowance for replacing worn out capital
macroeconomics theory
why economy expands and contracts
aggregate demand curve
inverse relationship between price and planned expenditures
aggregate supply curve
inverse relationship between price and real output
when output drops below potential
stable prices
prices and wages remain the same
net interest
all interest paid. Total interest