Microeconomics Chapter 2

Front 1

economizing problem

Back 1

society's economic wants are virtually unlimited and insatiable; economic resources are limited or scarce

Front 2

utility

Back 2

pleasure or satisfaction

Front 3

economic resources

Back 3

all natural, human, and manufactured resources that go into the production of goods and services

Front 4

land

Back 4

all natural resources that are used in the production process, such as arable land, forests, mineral and oil deposits, and water resources

Front 5

capital

Back 5

all mfg aids used in producing consumer goods and services

Front 6

investment

Back 6

process of producing and purchasing capital goods

Front 7

labor

Back 7

all the physical and mental talents of individuals available and usable in producing goods and services

Front 8

factors of production

Back 8

land, labor, capital, and entrepreneurial ability

Front 9

full employment

Back 9

the use of all available resources

Front 10

full production

Back 10

all employed resources should be used so that they provide the maximum possible satisfaction of our material wants

Front 11

entrepreneurial ability

Back 11

the special human resource, distinct from labor

Front 12

productive efficiency

Back 12

production of any particular mix of goods and services in the least costly way

Front 13

allocative efficiency

Back 13

production of that particular mix of goods and services most wanted by society

Front 14

consumer goods

Back 14

products that satisfy our wants directly

Front 15

capital goods

Back 15

products that satisfy our wants indirectly by making possible more efficient production of consumer goods

Front 16

production possibilities table

Back 16

lists the different combinations of 2 products that can be produced with a specific set of resources

Front 17

productive possibilities curve

Back 17

curve showing the different combinations of 2 goods or services that can be produced in a full-employment, full-production economy where the available supplies of resources and technology are fixed

Front 18

opportunity cost

Back 18

amount of other products that must be forgone or sacrificed to obtain 1 unit of a specific good

Front 19

law of increasing opportunity costs

Back 19

the more of a product that is produced, the greater its opportunity cost

Front 20

economic growth

Back 20

the ability to produce a larger total output

Front 21

economic system

Back 21

a particular set of institutional arrangement and a coordinating mechanism

Front 22

market system

Back 22

private ownership of resources and the use of markets and prices to coordinate and direct economic activity

Front 23

capitalism

Back 23

private ownership of resources and the use of markets and prices to coordinate and direct economic activity

Front 24

command system

Back 24

(communism) gov't owns most property resources and economic decision making occurs through a central economic plan

Front 25

resource market

Back 25

place where resources or the services of resource suppliers are bought and sold

Front 26

product market

Back 26

place where goods and services produced by businesses are bought and sold

Front 27

circular flow model

Back 27

a complex, interrelated web of decision making and economic activity involving businesses and households