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41 Cards in this Set
- Front
- Back
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Economics...
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The social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity
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Economic Perspective...
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An economic way of thinking by analyzing marginal costs and benefits associated with decision making
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Opportunity Cost...
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In order to obtain more of one thing, society forgoes the opportunity of getting the next best thing. This sacrifice is opportunity cost
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Utility...
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The pleasure, happiness, or satisfaction obtained from consuming a good or service
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Marginal Analysis...
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Comparisions of marginal benefits and marginal costs, usually for decision making. Marginal means extra.
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Economic Principle...
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A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions. 2+ Principles are incorporated into models
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Ceteris Paribus...
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Latin for "Other Things Equal". It assumes that the factors other than those being considered do not change
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Macroeconomics...
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Examines the economy as a whole or its basic subdivisions or aggregates, such as the government, household, or business sectors
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Aggregate...
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Collection of specific economic units treated as if they were one unit
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Microeconomics...
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Economics concerned with individual units like a person, household, a firm, or an industry.
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Positive Economics...
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Focuses on facts and cause-and-effect relationships
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Normative Economics...
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Incorporates value judgments about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal.
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Economizing Problem...
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The need to make choices because economic wants exceed economic means
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Budget Line (or Constraint)...
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A curve that shows various combinations of two products a consumer can purchase with specific money income. It is a generalization
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Land...
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All natural resources used in the production process
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Capital (Goods)...
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All manufactured aids used in producing consumer goods and services, ie. factory, storage, transportation, machinary. But NOT money.
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Entrpenurial Ability...
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Special human resource; takes initiative; makes strategic business decisions; an innovator; a risk bearer
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Full Employment...
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The economy is employing all its available resources
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Production Possibilities Curve...
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A graphical representation of the combinations of different goods and services that society can produce in a fully employed economy, assuming a fixed availability of supplies of resources and constant technology
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Law of increasing Opportunity Cost...
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As the production of a particular good increases, the opportunity cost of procuding and additional unit rises
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Economic Growth...
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A larger total output
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Economic System...
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A particular set of institutional arrangements and a coordinating mechanism to respond to the economizing problem
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Command System...
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Socialism or Communism. Gov't owns most property resources and economic decision making occurs through a central economic plan
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Market System...
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Capitalism. Characterized by the private ownership of resources and the use of markets and prices to coordinate and directed economic activity. Participants act in their own self interest and markets regulate themselves.
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Freedom of Enterprise...
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Ensures that entrepeneurs and private business owners are free to obtain and use economic resources to produce their choice of goods and services and to sell them in their chosen markets
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Freedom of Choice...
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Enables owners to employ or dispose of their property and money as they see fit
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Self-Interest...
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The motivating force behind the various economic units as they express their free choice
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Competition...
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The market system depends on it; the basis is the the freeome of choice exercised in pursuit of monetary return. Includes 2 or more buyers/sellers acting independently of each other.
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Market...
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An institution or Mechanism that brings buyers and sellers into contact
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Specialization...
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Use of resources of an individual. firm, region, or nation to produce one or a few goods or services rather than the entire range of goods and services
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Division of Labor...
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Human specialization that makes use of differences in ability, fosters learning by doing, saves time
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Medium of Exchange...
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Money; it makes trade easier
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Barter...
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Swapping goods for goods, but requires a coincidence of wants
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Money...
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A convienent social invention to facilitate exhances of goods and services
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Consumer sovereignty...
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Crucial in determining the types and quantities of goods produced
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Dollar Votes...
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The "verdict" made by the people for the people as the register their wants in the market simply by purchasing specific items
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"Invisible Hand"...
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The tendency of firms and resource suppliers that seek to further their own self-interests in competetive markets to also promote the interest of society
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Circular Flow Diagrams...
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Illustrate the dynamic market economy; the continuous, repetitive flows of goods and services, resources, and money
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Resource Market...
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The place where resources or the services of resource suppliers are bought and sold
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Product Market...
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The place where goods and services produced by businesses are bought and sold
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Demand...
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Scheduleor a curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time
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