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19 Cards in this Set

  • Front
  • Back
Opportunity cost
The best alternative sacrificed for a chosen alternative
Marginal analysis
An examination of the effects of additions to or subtractions from a current situation
Production possiblities curve
a curve that shows the maximum combination of two outputs an economy can produce in a given perion of time with its available resources and technology
The body of knowledge applied to how goods are produced
Law of increasing opportunity costs
The principle that the opportunity cost increases as the production of one output expands
Economic growth
The ability of an economy to produce greater levels of output, represted by an outward shift of its production possiblitities curve
The Accumulation of capital, such as factories, machines and inventories, that is used to produce goods and services
Economic system
The organizations and methods used to determine what goods and services are produced, how they are produced, and for whom they are produced
Traditional economy
A system that answers the What, How, and for whom questions the way they have always been answered
Command Economy
A system that answers the What, How, and for Whom questions by central authority
Market Economy
An economic system that answers the What, How , and for Whom Questions using prices determined by the interactoin of forces of supply and demand
Adam Smith
(1723-1790) the father of modern economics who wrote "the wealth of nations" published in 1776
Invisible hand
a phrase that expresses the belief that the best interests of a society are served when individual consumers and producers compete to achieve their own private interests.
Mixed economy
an economic system that answers the What, How, and for Whom questions through a mixture of traditional, command, and market systems
an economic system characterized by private ownership of resources and markets
Consumer Sovereignty
The freedom of consumers to cast their dollar votes to buy, at prices determinded in competitive markets
An economic system characterized by goverment ownership of resources and centralized decision making
A stateless, classless economic system in which all the factors of production are owned by the workers and people share in production according to their needs. In Marx's view, this is the highest form of socialism toward which the revolution should strive
Karl Marx
(1818-1883) His criticim of capitalism advanced communism