Macro Test 1 (Ch 1-4)

Front 1

The science of scarcity; the science of how individuals and societies deal with the fact that wants are greater than the limited resources available to satisfy those wants

Back 1

economics

Front 2

the condition in which our wants are greater than the limited resources available to satisfy those wants

Back 2

scarcity

Front 3

the study of "what is" in economic matters; can be tested

Back 3

positive economics

Front 4

the study of "what should be" in economic matters; cannot be tested

Back 4

normative economics

Front 5

branch of economics that deals with human behavior and choices as they relate to relatively small units - an individual, a firm, an industry, a single market

Back 5

microeconomics

Front 6

the branch of economics that deals with human behavior and choices as they relate to highly aggregate markets (such as the goods and services market) or the entire economy

Back 6

macroeconomics

Front 7

the satisfaction one receives from a good

Back 7

utility

Front 8

anything from which individuals receive utility or satisfaction

Back 8

good

Front 9

the dissatisfaction on receives from a bad

Back 9

disultility

Front 10

anything from which individuals receive disutility or dissatisfaction

Back 10

bad

Front 11

all natural resources, such as minerals, forests, water, and unimproved land

Back 11

land

Front 12

the physical and mental talents people contribute to the production process

Back 12

labor

Front 13

produced goods that can be used as inputs for further production, such as factories, machinery, tools, computers, and buildings

Back 13

capital

Front 14

the particular talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things

Back 14

entrepreneurship

Front 15

a means for deciding who gets what of available resources and goods

Back 15

rationing device

Front 16

the most highly valued opportunity or alternative forfeited when a choice is made

Back 16

opportunity cost

Front 17

additional benefits, the benefits connected with consuming an additional unit of a good or undertaking one more unit of an activity

Back 17

marginal benefits

Front 18

additional costs, the costs connected to consuming an additional unit of a good or undertaking on more unit of an activity

Back 18

marginal costs

Front 19

decision making characterized by weighing the additional benefits of a change against the additional costs of a change with respect to current conditions

Back 19

decisions at the margin

Front 20

exists when marginal benefits equal marginal costs

Back 20

efficiency

Front 21

"all other things constant", "nothing else changes"

Back 21

ceteris paribus

Front 22

the erroneous view that what is good or true for the individual is necessarily good or true for the group

Back 22

fallacy of composition

Front 23

the value of the entire output produced annually within a country's borders

Back 23

gross domestic product

Front 24

represents possible combinations of the two goods that can be produced in a certain period of time, under the conditions of a given state of technology and fully employed resources

Back 24

PPF, production possiblities frontier

Front 25

as more of a good is produced, the opportunity costs of producing that good increase

Back 25

law of increasing opportunity costs

Front 26

the condition where the maximum output is produced with given resources and technology

Back 26

productive efficiency

Front 27

the condition where less than the maximum output is produced with given resources and technology

Back 27

productive inefficiency

Front 28

before trade

Back 28

ex ante

Front 29

after trade

Back 29

ex post

Front 30

how much of one thing is given up for how much of something else

Back 30

terms of trade

Front 31

the costs associated with the time and effort needed to search out, negotiate, and consummate an exchange

Back 31

transaction costs

Front 32

the situation where someone can produce a good at lower opportunity cost than someone else can

Back 32

comparitive advantage

Front 33

the way in which society decides to answer key economic questions - those relating to production and trade in particular

Back 33

economic system

Front 34

3 questions of economic system that relate to production:

Back 34

what goods will be produced?
how will they be produced?
for whom will the goods be produced?

Front 35

2 questions of economic system relating to trade:

Back 35

what is the nature of trade?
what function do prices serve?

Front 36

economic system characterized by largely private ownership of factors of production, market allocation of resources, and decentralized decision making. economic activity takes place in the private sector, but government plays a substantial economic and regulatory role.

Back 36

mixed capitalism

Front 37

the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period

Back 37

demand

Front 38

as the price of a good rises, the quantity demanded of the good falls, vice-versa, ceteris paribus

Back 38

law of demand