Ap Economics Chapter 1

Front 1

The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity

Back 1

Economics

Front 2

Economic way of thinking

Back 2

Economic Perspective

Front 3

The amount of other products that must be forgone or sacrificed to produce a unit of a product

Back 3

Opportunity Cost

Front 4

The pleasure, happiness, or satisfaction obtained from consuming a good or service

Back 4

Utility

Front 5

Comparisons of marginal benefits and marginal costs, usually for decision making

Back 5

Marginal Analysis

Front 6

A statement about economic behaviour or the economy that enables prediction of the probable effects of certain actions

Back 6

Economic Principle

Front 7

The assumption that factors other than those being considered do not change (a.k.a ceteris paribus)

Back 7

Other-Things-Equal Assumption

Front 8

The part of economics concerned with the economy as a whole; with such major aggregates as the household, business, and government sectors; and with measures of the total economy

Back 8

Macroeconomics

Front 9

A collection of specific economic units treated as if they were one. (e.g. "price level" and "gross domestic product").

Back 9

Aggregate

Front 10

The part of economics concerned with decision making by individual units such as a household, a firm, or an industry and with individual markets, specific goods and services, and product and resource prices

Back 10

Microeconomics

Front 11

Focuses on facts and cause-and-effect relationships; "what is"

Back 11

Positive Economics

Front 12

incorporates value judgements about what the economy should be like; "what ought to be"

Back 12

Normative Economics

Front 13

The need to make choices because economic wants exceed economic means

Back 13

Economizing Problem

Front 14

A schedule or curve that shows various combinations of two products a consumer can purchase with a specific money income

Back 14

Budget Line

Front 15

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

Back 15

Economic Resources

Front 16

All natural resources used in the production process (e.g. arable land, forests, etc.)

Back 16

Land

Front 17

Physical + mental talents of individuals used in producing goods + services

Back 17

Labour

Front 18

All manufactured aids used in producing consumer goods + services

Back 18

Capital

Front 19

The purchase of capital goods

Back 19

Investment

Front 20

The human resources that combines other resources to produce a product; makes non-routine decisions, innovates, and bears risks

Back 20

Entrepreneurial Ability

Front 21

Land, labour, capital, and entrepreneurial ability because they are combined to produce goods and services

Back 21

Factors of Productions

Front 22

Products that satisfy our wants directly

Back 22

Consumer Goods

Front 23

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

Back 23

Capital Goods

Front 24

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

Back 24

Production Possibilities Curve

Front 25

As the production of a particular good increases, the opportunity costs of producing an additional unit rises.

Back 25

Law of Increasing Opportunity Costs

Front 26

An outward shift in the PPC that results from an increase in resource supplies or quality or an improvement in technology

Back 26

Economic Growth

Front 27

The assumption that what is true for one individual or part of a whole is true for a group of individuals or the whole

Back 27

Fallacy of Composition

Front 28

The reasoning that because event A preceded event B, event A caused event B ("the rooster crows before the dawn, but does not cause the sunrise").

Back 28

Post Hoc Fallacy