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64 Cards in this Set
- Front
- Back
the study of how best to allocate scarce resources among competing uses
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economics
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the most desired goods and services that are forgone in order to obtain something else
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opportunity cost
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resource inputs used to produce goods and services; e.g. land labor capital and entrepreneurship
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factors of production
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lack of enough resources to satisfy all desired uses of those resources
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scarcity
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natural resources
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land
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number and skills of workers
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labor
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machinery, buildings, networks
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capital
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skill in creating products, services, processes
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entrepreneurship
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the alternative combinations of goods and services that could be produced in a given time period with all available resources and technology
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production possibilities curve
the what? |
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expenditures on production of new plant and equipment capital in a given time period, plus changes in business inventories
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investment
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an increase in output (real GDP): an expansion of production possibilities
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economic growth
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the use of market prices and sales to signal desired outputs or resource allocations
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market mechanism
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the doctrine of "leave it along" of nonintervention by gov. in the market mechanism
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laissez faire
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an economy that uses both market and nonmarket signals to allocate goods and resources
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mixed economy
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an imperfection in the market mechanism that prevents optimal outcome
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market failure
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costs (or benefits) of a market activity borne by a third party; the difference between the social and private costs (or benefits) of a market activity
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externalities
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government intervention that fails to improve economic outcomes
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government failure
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the study of aggregate economic behavior, of the economy as a whole
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macroeconomics
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the study of individual behavior in the economy, of the components of the larger economy
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mircoeconomics
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the assumption that nothing else changes
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ceteris paribus
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all production entails an opportunity cost
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we can produce more of output a if we produce less of output b
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by multiplying the physical output of each good by its price,
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we can determine the total value of each good produced
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the total value of final goods and services produced within a nation's borders in a given time period
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GDP
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the value of output measured in current prices
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nominal GDP
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the inflation-adjusted value of GDP; the value of output measured in constant prices
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real GDP
this is what you compare |
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total GDP divided by total population: average GDP
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per capita GDP
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an increase in output (real GDP); an expansion of production possibilities
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economic growth
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mix of output
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household consumption
business investment gov services exports |
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consumers
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durables,
nondurables - food, water, inelastic services |
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expenditures on production of new plant and equipment (capital) in a given time period, plus changes in business inventories
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investment
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payments to individuals for which no current goods or services are exchanged; social security, welfare, unemployment benefits
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income transfers
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imports are greater than
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exports
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resource inputs used to produce goods and services, eg land labor capital entrepreneurship
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factors or production
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production processes that use a high ration of capital to labor inputs
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capital intensive
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output per unit of input, eg, output per labor hour
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productivity
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the knowledge and skills possessed by the workforce
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human capital
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a firm that produces the entire market supply of a particular good or service
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monopoly
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costs or benefits of a market activity borne by a third party
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externalities
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the way total personal income is divided up among households or income classes
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personal distribution of income
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a tax system in which tax rates rise as income rises
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progressive tax
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a tax system in which tax rates fall as incomes rise
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regressive tax
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any place where goods are bought and sold
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market
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any place where factors of production, land labor capital, entrep) are bought and sold
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factor market
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any place where finished goods and services products are bought and sold
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product market
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the direct exchange of one good for another, without the use of money
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barter
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the ability and willingness to sell/ produce specific quantities of a good at alternative prices in a given time period, ceteris paribus
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supply
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the ability and willingness to buy specific quantities of a good at alternative prices in a give time period, ceteris paribus
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demand
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the most desired goods or services that are forgone in order to obtain something else
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opportunity cost
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a table showing the quantities of a good a consumer is willing and able to buy at alternative prices in a give time period, ceteris paribus
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demand schedule
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a curve describing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period
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demand curve
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the quantity of a good demanded in a given time period increases as its price falls, inverse
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law of demand
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the assumption of nothing else changing
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ceteris paribus
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a change in the quantity demanded at any given price
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shift in demand
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changes in quantity demanded
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movements along a given demand curve in response to price changes of that good
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change in demand
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shifts of demand curve due to changes in tastes, income, other goods, expectations
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the total quantities of a good or service people are willing and able to buy at alternative prices in a given time period; the sum of individual demands
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market demand
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the total quantities of a good that sellers are willing and able to sell at alternative prices in a given time period
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market supply
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the quantity of a good supplied in a given time period increases as its price increases
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law of supply
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the amount by which the quantity demanded exceeds the quantity supplied at a give price; excess demand
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market shortage
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the amount by which the quantity supplied exceeds the quantity demanded at a give price; excess supply
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market surplus
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upper limit imposed on the price of a good or service
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price ceiling
CDI ceiling, demand increases so it causes a shortage |
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lower limit imposed on the price of a good
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price floor
supply up, causes surpluses |
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government intervention that fails to improve economic outcomes
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gov failure
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the use of market prices and sales to signal desired outputs or resource allocations
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market mechanism
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