Economics And Public Policy, Chpt 1

Front 1

Scarcity

Back 1

If More is wanted than is Available

Front 2

Economics

Back 2

The study of how individuals and groups of individuals respond to and deal with scarcity

Front 3

Leisure

Back 3

time spent in any activity other than working

Front 4

Work

Back 4

An activity an individual engages in that increases the amount of goods and services the individual can consume

Front 5

Save

Back 5

Forgone consumption, allows individuals to transfer income from today to the future

Front 6

Opportunity cost

Back 6

The value to the individual of the best alternative that the individual could have chosen but did not

Front 7

Production Possibilities Frontier

Back 7

Is the boundary between the output mixes that can be produced and those that, given scarce resources and available technologies, cannot

Front 8

Input

Back 8

A resource that is used to produce goods or services

Front 9

Physical Capitol

Back 9

Capitol in the form of Tools

Front 10

Human Capitol

Back 10

Capitol in the form of individuals with developed skills

Front 11

Technology

Back 11

The particular method by which tools and work effort are combined to produce goods, often embodied in the tools themselves

Front 12

Logical Model

Back 12

An abstraction that shows the most important elements of a complex situation in which many things interact and change by focusing on a simpler version

Front 13

Competition

Back 13

Creates a potential for conflict and a need for coordination

Front 14

Self-interest

Back 14

Individuals who respond to Circumstances by examining how the options, decisions, and responses affect themselves

Front 15

Incentives

Back 15

Inducements which motivate people to make choices

Front 16

Spontaneous Order

Back 16

A circular pattern that emerges from individuals with competing interests, no coordinator needed

Front 17

Invisible Hand

Back 17

Unintended beneficial consequences for others that result from the individual pursuit of self-interest

Front 18

Society

Back 18

Improves the well being of the individuals because of the ability to trade

Front 19

Comparative Advantage

Back 19

When something can be produced relatively better, or easier, than for some people

Front 20

Relative Production Costs

Back 20

differences in the costs to individuals of producing one thing versus producing another