Macroeconomics Unit 1

Front 1

social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity

Back 1

economics

Front 2

pleasure, happiness, or satisfaction obtained form consuming a good/service

Back 2

utility

Front 3

is opportunity cost always present with a choice is made?

Back 3

yes

Front 4

collection of specific economic units treated as if they were one unit

Back 4

aggregate

Front 5

this form of economics focuses on facts and cause-and-effect relationships and WHAT IS

Back 5

positive economics

Front 6

this form of economics incorporates value judgements about what economy should be like or what actions should be taken - WHAT OUGHT TO BE

Back 6

normative economics

Front 7

socialism or communism is what kind of economic system?

Back 7

command system

Front 8

coincidence of wants between buyer and seller must be present for what to occur?

Back 8

bartering

Front 9

convenient social invention to facilitate exchanges of goods/services

Back 9

money

Front 10

this term refers to consumers registering their wants in the market by spending

Back 10

dollar votes

Front 11

this expression refers to the tendency of firms and resource suppliers that seek to further their own self-interests in competitive markets to also promote the interests of society

Back 11

invisible hand

Front 12

this law says that buyer derives less satisfaction from each successive unit of product consumed

Back 12

diminishing marginal utility

Front 13

this term refers to the idea that a lower price increases purchasing power of a buyers money income

Back 13

income effect

Front 14

this term refers to the idea that a lower price gives buyers incentives to substitute product for a less expensive similar product

Back 14

substitution effect

Front 15

who are complementary goods related to one another?

Back 15

as the demand for one increases, the demand for the complementary good decreases

Front 16

ability of competitive forces to establish a price at which selling and buying decisions are consistent

Back 16

rationing function of prices

Front 17

manner in which national income is divided among the functions performed to earn it; division of income

Back 17

functional distribution of income

Front 18

durable goods have a life of how long?

Back 18

3 or more years

Front 19

physical establishment that performs one or more functions in fabricating and distributing goods/services

Back 19

plant

Front 20

organization that employs resources to produce goods/services for profit and operates one or more plants

Back 20

firm

Front 21

group of firms that produce the same or similar product

Back 21

industry

Front 22

legal creation owned by stockholders

Back 22

corporation

Front 23

this lends money to a corporation without giving ownership

Back 23

bond

Front 24

restriction of the maximum loss to a predetermined amount for the stockholders

Back 24

limited liability

Front 25

conflict of interest that occurs when agents pursue their own objectives to the detriment of the stockholders' goals

Back 25

principal-agent problem

Front 26

welfare checks, food stamps, and unemployment compensation are examples of what?

Back 26

transfer payments

Front 27

this occurs when some costs or benefits of a good are passed on or spill over to someone other than the immediate buyer or seller

Back 27

externality

Front 28

public goods that can be priced and provided by private firms through market system

Back 28

quasi-system

Front 29

this exists when economy's output matches its production capacity, labor resources are fully employed, and inflation is low

Back 29

promoting stability