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35 Cards in this Set

  • Front
  • Back
economics
the social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity
economic perspective
economic way of thinking
opportunity costs
to obtain more of one thing, society forgoes the opportunity of getting the next best thing
utility
the pleasure, happiness, or satisfaction obtained from consuming a good or service
marginal analysis
comparisons of marginal benefits and marginal costs, usually for decision making
the scientific method
like all sciences, economics relies on this
economic principle
a statement about economic behavior or the economy that enables prediction of the probable effects of certain actions
other-things-equal assumption
the assumption that factors other than those being considered do not change
microeconomics
the part of economics concerned with individual units such as a person, a household, a firm, or an industry
macroeconomics
examines either the economy as a whole or its basic subdivisions or aggregates such as the government, household, and business sectors
aggregate
a collection of specific economics units treated as if they were one unit
positive economics
focuses on facts and cause-and-effect relationships
normative economics
incorporates value judgements about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal
economizing problem
the need to make choices because economic wants exceed economic means
budget line
a schedule or curve that shows various combinations of two products a consumer can purchase with a specific money income
land
includes all natural resources used in the production process
labor
consists of the physical and mental talents of individuals used in producing goods and services
capital
incluses all manufactured aids used in producing consumer goods and services
investment
the purchase of capital goods
entrepreneurial ability
the human resource that combines the other resources to produce a product, makes non routine decisions, innovates, and bears risks
factors of production
inputs
consumer goods
products that satisfy our wants directly
capital goods
products that satisfy our wants indirectly by making possible more efficient production of consumer goods
production possibilities curve
displays the different combinations of goods and services that society can produce in a fully employed economy, assuming a fixed availability of supplies of resources and constant technology
law of increasing opportunity costs
as the production of a particular good increases, the opportunity cost of producing an additional unit rises
economic growth
a larger total output
economic resources
all natural, human, and manufactured resources that go into the production of goods and services
horizontal axis
the "left-right" or "west-east" measurement line on graph or grid
vertical axis
the "up-down" or "north-south" measurement on graph or grid
direct relationship
the relationship between two variables that change in the same direction; positive relationship
inverse relationship
the relationship between two variables that change in the opposite direction, negative relationship
independent variable
the variable causing a change in some other (dependent) variable
dependent variable
a variable that changes as a consequence of a change in some other (independent) variable; the "effect" or outcome
slope of a straight line
the ratio of the vertical change (the rise or fall) to the horizontal changes (the run) between any two points on a line
vertical intercept
the point at which a line meets the vertical axis on a graph or grid