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18 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Scarcity |
The condition that arises because wants always exceed what can be produced with limited resources |
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Goods |
The physical items that consumers are willing to pay for |
Meat, jeans, cars. |
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Services |
The tasks performed by others that consumers are willing to pay for |
Haircuts, dental, education |
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Production |
Any activity that results in the conversion of resources into goods and services |
Manufacturing, retailing of goods, delivery services |
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Land |
Nonhuman gifts of nature |
Fish, water, timber |
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Labour |
Productive contributions made by individuals who work |
Steelworkers, ballet dancers |
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Human Capital |
The education and training of workers |
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Physical Capital |
Factories and equipment used in production |
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Economics |
A social science that studies how people allocate thier limited resources to satisfy thier wants |
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Microeconomics |
The study of decision making undertaken by individuals and by firms in specific parts of the economy. Such as households, firms, occupations. |
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Macroeconomics |
The study of the behaviour of the economy as a whole. |
Changes in unemployment, general price level, national income. |
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Aggregates |
Economywide measures |
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Economic Way of Thinking |
Assumes that the typical response to an economic problem of scarcity is rational behavior |
Act as if motivated by self-interest |
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Rationality assumption |
An individual makes decisions based on maximizing his own self interest |
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Opportunity Costs |
The value of the best alternative that must be given up because a choice was made. |
It is more valuable to study an extra hour than to sleep for that hour |
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Marginal Benefit |
All the extra benefits that one recieves in pursuing a course of action. |
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Marginal Cost |
All the extra costs or sacrifices incurred in pursuing a course of action |
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Sunk Costs |
Irreversible costs incurred prior to your decision |
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