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25 Cards in this Set
- Front
- Back
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the additional benefit over and above the costs you have already incurred
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marginal cost
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costs that have already been incurred and cannot be recovered
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sunk costs
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the additional benefit above what you've already derived
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marginal benefit
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the benefit forgone by undertaking that activity
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opportunity cost
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the necessary reactions to scarcity
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economic forces
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an economic force that is given relatively free rein by society to work through the market
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market force
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the price mechanism, the rise and fall of prices that guides our actions ina a market
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invisible hand
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a market eonomy, through the price mechanism, will tend to allocate resources efficiently
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invisible hand theory
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the study of an individual choice, and how that choice is influenced by economic forces
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microeconomics
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the study of the economy as a whole
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macroeconomics
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actions (or inaction) taken by government to influence economic actions
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economic policies
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the study of what is, and how the economy works
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positive economics
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the study of what the goals of the economy should be
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normative economics
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the application of the knowledge learned in positive economics to the achievement of the goals one has determined in normative economics
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art of economics
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the goods available are too few to satisfy individuals' desires
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scarcity
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a curve measuring the maximum combination of outputs that can be obtained from a given number of inputs
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production possibility curve (PPC)
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a result of an activity
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output
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what you put into a production process to achieve an output
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input
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the ability to be better suited to the production of one good than to the production of another good
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comparative advantage
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in order to get more of something, one must give up ever-increasing quantities of something else
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principle of increasing marginal opportunity cost
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achieving as much output as possible from a given amount of inputs or resources
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productive efficiency
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getting less output from inputs that, if devoted to some other activity, would produce more output
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inefficiency
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achieving a goal using as few inputs as possible
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efficiency
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the relocation of production once done in the United States to foreign countries
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outsourcing
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no trade is possible without voluntary transactions on both parts
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benefit of trade
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