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15 Cards in this Set

  • Front
  • Back
Lack of enough resources to satisfy all desired uses of those resources
Opportunity Cost
The most desired goods or services that are forgone in order to obtain something else
Maximum output of a good from the resources used in production
Economic growth
An increase in output, an expansion of production possibilities
Market Mechanism
The use of market prices and sales to signal desired ouputs (resource allocations)
Laissez faire
The doctrine of "leave it alone," of nonintervention by goverment in the market mechanism
Mixed economy
An economy that uses both market signals and government directives to allocate goods and resources
Market Failure
An imperfection in the market mechanism that prevents optimal outcomes
government Failure
Government intervention that fails to improve economic outcomes
the study of individual behavior in the economy, of the components of the larger economy
Income Transfers
Payments to individuals for which no current goods or services are exchanged (social security, welfare, unemployment benefits)
comparitive Advantage
The ability of a country to produce a specific good at a lower opportunity cost than its trading partners
Output per unit of input, such as output per labor hour
Capital Intensive
Production processes that use a high rate of capital to labor inputs
Human Capital
the knowledge and skills possessed by the work force