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20 Cards in this Set
- Front
- Back
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Economics
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The study of the choices made by people when there is scarcity.
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Scarcity
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A situation in which resources are limited and can be used in different ways, so one good or service must be sacrificed for another.
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Factors of Production
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Natural Resources, Labor, Physical Capital, Human Capital, & Entrepreneurship.
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Natural Resources
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Things created by acts of nature and used to produce goods and services.
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Labor
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Human effort, including both physical and mental effort, used to produce goods and services.
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Physical capital
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Objects made by human beings to produce goods and services.
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Human capital
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The knowledge and skills acquired by a worker through education and experience and used to produce goods and services.
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Entrepreneurship
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Effort used to coordinate the production and sale of goods and services.
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Production possibilities curve
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A curve that shows the possible combinations of goods and services available to an economy, given that all productive resources are fully employed and efficiently used.
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Market
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An arrangement that allows buyers and sellers to exchange things: A buyer exchanges money for a product; a seller exchanges a product for money.
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Positive economics
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Analysis that answers the questions, what is or what will be?
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Normative economics
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Analysis that answers the question, What ought to be?
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Variable
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A measure of somethiang that can take on different values.
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Ceteris paribus
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Latin, meaning "other things being equal." In economics, the phrase indicates that all other variables are held fixed.
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Marginal change
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A small change in value.
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Microeconomics
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The study of the choices made by consumers, firms, and government and of how their choices affect the market for a particular good or service.
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Macroeconomics
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The study of the nation's economy as a whole.
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Positive relationship
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A relationship in which an increase in the value of one variable increases the value of another variable.
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Negative relationship
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A relationship in which an increase in the value of one variable decreases the value of another variable.
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Slope of a curve
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The change in the variable on the vertical axis resulting from a one-unit increase in the variable on the horizontal axis.
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