Economics Chapter 1

Front 1

Scarcity

Back 1

A situation in which there is not enough of a resource to meet all of everyone's wants.

Front 2

Economics-

Back 2

The social science that seeks to understand the choices people make in using scarce rescources to meet their wants.

Front 3

Microeconomics--

Back 3

The branch of economics that studies the choices of individuals, including households, business firms, and government agencies.

Front 4

Macroeconomics-

Back 4

The branch of economics that studies large-scale economic phenomena, particularly inflation, unemployment, and economic growth.

Front 5

Factors of production

Back 5

The basic inputs of labor, capital, and natural resources used in producing all goods and services.

Front 6

Capital

Back 6

All means of production that are created by people, including tools, industrial equipment, and structures.

Front 7

Natural resources-

Back 7

Anything that can be used as a productive input in its natural state, such as farmland, building sites, forests, and mineral deposits.

Front 8

Opportunity cost-

Back 8

The cost of a good or service measured in terms of the forgone opportunity to pursue the best possible alternative activity with the same time or resources

Front 9

Economic efficiency

Back 9

A state of affairs in which it is impossible to make any change that satisfies one person's wants more fully without causing some other person's wants to be satisfied less fully.

Front 10

Efficiency in production

Back 10

A situation in which it is not possible, given available knowledge and productive resources, to produce more of one good without forgoing the opportunity to produce some of another good.

Front 11

Investment

Back 11

The act of increasing the economy's stock of capital- that is, its supply of means of production made by people.

Front 12

Entrepreneurship

Back 12

The process of looking for new possibilities- making use of new ways of doing things, being alert to new opportunities, and overcoming old limits.

Front 13

Comparative advantage

Back 13

The ability to produce a good or service at a relatively lower opportunity cost than someone else.

Front 14

Efficiency in distribution-

Back 14

A situation in which it is not possible, by redistributing existing supplies of goods, to satisfy one person's wants more fully without causing some other person'swants to be satisfied less fully.

Front 15

Positive economics-

Back 15

The area of economics that is concerned with facts and the relationships among them.

Front 16

Normative Econmics-

Back 16

The area of economics that is devoted to judgments about whether economic policies or conditions are good or bad.

Front 17

Hierarchy-

Back 17

A way of achieving coordination in which individual actions are guided by instructions from a central authority.

Front 18

Spontaneous order-

Back 18

A way of achieving coordination in which individuals adjust their actions in response to cues from their immediate environment.

Front 19

Market

Back 19

Any arrangement people havefor trading with one another.

Front 20

Theory

Back 20

A representation of the way in which facts are related to one another.

Front 21

Model

Back 21

A synonym for theory; in economics, often applied to theories that are stated in graphical or mathematical form.

Front 22

Production possibility frontier

Back 22

A graph that shows possible combinations of goods that can be produced by an economy given available knowledge and factors of production.

Front 23

Empirical

Back 23

Based on experience or observation.

Front 24

Econometrics

Back 24

The statistical analysis of empirical economic data.

Front 25

Conditional forecast

Back 25

A predicion of future economic events in the form "If A, then B, other things being equal."

Front 26

Slope

Back 26

For a straaight line, the ratio of the change in the y value to the change in the x value between any two points on the line.

Front 27

Positive slope

Back 27

A slope having a value greater than zero.

Front 28

Direct relationship

Back 28

A relationship between two variables in which an increase in the value of one variable is associated with an increase in the value of the other.

Front 29

Negative slope

Back 29

A slope having a value less than zero.

Front 30

Inverse relationship

Back 30

A relationship between two variables in which an increase in the value of one variable is associated with a decrease in the value of the other

Front 31

Tangent

Back 31

A straight line that touches a curve at a given point without intersecting it.