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| the resources we use to produce goods and services are limited |
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| the study of choices when there is scarcity |
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| the resources used to produce goods and services; also known as production inputs |
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| resources provided by nature and used to produce goods and services |
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| the physical and mental effort people use to produce goods and services |
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| the stock of equipment, machines, structures, and infrastructure that is used to produce goods and services |
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| the knowledge and skills acquired by a worker through education and experience |
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| the effort used to coordinate the factors of production-natural resources, labor, physical capital, and human capital- to produce and sell products. |
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Definition
| answers the question "what is?" or "what will be" |
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| answers the question "what ought to be" |
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| a simplified representation of an economic environment, often employing a graph |
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| a measure of something that can take on different values |
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| latin expression meaning other variables being held fixed |
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Definition
| a small, one unit change in value |
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Definition
| the study of the nation's economy as a whole; focuses on the issues of inflation, unempolyment, and economic growth |
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Definition
| the study of the choices made by households, firms, and government and how these choices affect the markets for goods and services |
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Definition
| a relationship on which two variables move in the same direction |
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Definition
| a relationship in which two variables move in opposite directions |
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Definition
| the vertical difference between two points (rise) divided by the horizontal difference (run) |
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Definition
| what you sacrifice to get something |
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Term
| production possibilities curve |
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Definition
| a curve that shoes the possible combinations of products that an ecomony can produce, givien that is productive resources are fully employed and efficiently used |
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Definition
| the additional benefit resulting from a small increase in some activity |
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Definition
| the additional cost resulting from a small increase in some activity |
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| principle of opportunity cost |
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Definition
| the opportunity cost of something is what you sacrifice to get it |
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Term
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Definition
| increase the level of an activity as long as its marginal benefit exceeds its marginal cost. choose the level at which the marginal benefit equals the marginal cost |
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| principle of voluntary exchange |
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Definition
| a voluntary exchange between two people makes both people better off. |
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Term
| principle of diminishing return |
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Definition
| suppose output is producted with two or more inputs and we increase one input while holding the other input(s) fixed. beyond some point called the point of diminishing returns output will increase as a decresing rate. |
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Term
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Definition
| what matters to people is the real value of money or income its purchasing power not the "face" value of money or income. |
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| the face value of an amount of money |
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| the value of an amount of money in terms or what it can buy |
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| perfectly competitive market |
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Definition
| a market with so many buyers and sellers that no simgle buyer or seller can affect the market price |
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Definition
| the amount of a product that consumers are willing and able to buy |
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Definition
| the amount of a product that consumers are willing and able to buy |
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Term
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Definition
| a table that shows the relationship between the price of a product and the quantity demanded, ceteris paribus |
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Term
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Definition
| a curve that shows the relationship between the price of a good and quantity demanded by an individual consumer, ceteris paribus |
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Definition
| there is a negative relationship between price and quantity demanded, ceteris paribus |
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Term
| change in quantity demanded |
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Definition
| a change in the quantity consumers are willing and able to buy when the price changes; represented graphically by movement along the demand curve |
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Term
| change in quantity demanded |
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Definition
| a change in the quantity consumers are willing and able to buy when the price changes; represented graphically by movement along the demand curve |
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Term
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Definition
| a curve showing the relationship between price and quantity demanded by all consumers, ceteris paribus |
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Definition
| the amount of a product that firms are willing and able to sell |
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Definition
| a table that shows the relationship between the price of a product and quantity supplied, ceteris paribus |
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Term
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Definition
| a curve showing the relatinsip between price and quantity supplied by a single firm,ceteris paribus |
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Term
| change in quantity supplied |
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Definition
| a change in the quantity firms are willing and able to sell when the price changes; represented graphically by movement along the supply curve |
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Definition
| the lowest price at which a product will be supplied |
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Definition
| a curve showing the relationship between the market price and quantity supplies by all firms, ceteris paribus |
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Term
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Definition
| increase the level of an activity as long as its marginal benefit exceeds its marginal cost. choose the level at which the marginal benefit equals the marginal cost |
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Term
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Definition
| a curve showing the relaitonship between the market price and quantity supplied by all firms ceteris paribus |
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Term
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Definition
| a situation in which the quantity demanded equals the quantity supplies at the prevailing market price |
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Term
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Definition
| a situation in which at the prvailing price the quantity demanded exceeds the quantity supplied |
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Term
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Definition
| a situation in which at the prvailing price the quantity supplied exceeds the quantity demanded |
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Term
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Definition
| a shift of the demand curve caused by a change in a variable other than the price of the product |
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Definition
| a good for which an increase in income increases demand |
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Definition
| a good for which an incrase in income decreases demanded |
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Definition
| two goods for which an increase in the price of one good increases the demand for the other good |
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Definition
| two goods wfor which a decrease in the price of one good increases the demand for the other good |
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Term
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Definition
| a shift of the supply curve caused by a change in a variable other than the price of the product |
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