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13 Cards in this Set
- Front
- Back
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Capital
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The factories, machines, tools, ad inventories in an economy. (Education is sometimes referred to as human capital; factories, machines, etc., as physical capital) Capital is used in producing other goods and services.
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Decision-making rule
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If the additional benefits (correctly measured) are greater than the additional costs incurred (correctly measured, go for it. If the additional costs are greater than the additional benefits, do not do it.
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Economic resources
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Labor, capital, and our natural resources that can be used to produce goods and services.
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Fixed costs
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Costs that do not change as a result of a decision.
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Macroeconomics
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The study of the economy as a whole. Growth of economy-wide production, changes in unemployment, and rates of inflation are the most common concerns.
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Marginal benefit
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The increase in benefits resulting from an action. Or the increase in costs resulting from producing one more unit of output.
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Marginal cost
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The increase in costs resulting from an action. Or the increase in costs resulting from producing one more unit of output.
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Markets
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Methods through which buyers and sellers come together and in so doing determine the prices and the quantities of goods and services that will be exchanged.
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Microeconomics
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The study of individual consumers, workers, producers, businesses, and industries.
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Opportunity cost
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The value of the best forgone alternative. What one really gives up doing when making a choice.
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Rational decision-making
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The process of comparing the marginal benefits and marginal costs of an action. If the marginal benefits are greater than the marginal costs, a rational decision is to undertake the action.
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Scarcity
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Our wants are greater than our abilities to satisfy them. This leads to the necessity for making choices about how we use our resources.
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Sunk cost
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A cost that has already been paid and cannot be recovered.
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