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| The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity. |
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| A viewpoint that envisions individulas and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions. |
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| the amount of other products that must be forgone or sactificed to produce a unit of a product. |
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| The want satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service (or from the consumption of a collection of goods and services). |
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| the comparison of marginal ("extra" or "additional") benefits and marginal costs, usually for decision making. |
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| the procedure for the systematic pursuit of knowledge involving the observation of facts and the formulation ad testing of hypotheses to obtain theories, principles, and laws. |
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| a widely accepted generaliztion about the economic behavior of individuals or institutions |
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| other-things-equal assumption |
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| the assumption that factors other than those being considered are held constant; ceteris paribus assumption |
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| the part of economics concerned with decision making by individual units such as household, a firm, or an industry, and with individual markets, specific goods and services, and product and resources. |
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| the part of economics concerned with the economy as a whole; with such major aggregrates as te household, business, and government sectors; and with measures of the total economy. |
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| a collection of specific econmic units treated as if they were one. For example, all prices of individual goods and services are combined into a price level, or all units of output are aggregrates into gross domestic product. |
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| the analysis of facts or data to establish scientific generalizations about economic behavior |
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| the part of economics involving value judgements about what the economy should be like; focused on which economic goals and policies should be implemented; policy economics. |
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| the choices necessitated because society's economic wants for goods and services are unlimited but the resources availible to satisfy these wants are limited (scarce). |
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| a line that shows the different combinations of two products a consumer can purchase with a specific money income, given the products price. |
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| The land, labor, capital, and entrepreneurial ability that are used in the production of goods and services; productive agents; factors of production. |
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| natural resources ("free gifts of nature") used to produce goods and services. |
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| people's physical and mental talents and efforts that are used to help produce goods and services. |
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| human-made resources (buildings, machinery, and equipment) used to produce goods and services; goods that do not directly satisfy human wants; also called capital goods. |
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| in economics, spending for the production and accumlation of capital and additions to inventories. |
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| the human resource that combines the other resources to produce a product, makes nonroutine decisions, innovates, and bears risks. |
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| economic resources: land, capital, labor, and entrepreneurial ability. |
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| products and services that satisfy human wants directly |
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| production possibilities curve |
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| a curve showing the different combinations of two goods and services that can be produced in a full-employment, full-production economy where the availible supplies of resources and technology are fixed. |
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| law of increasing opportunity costs |
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| the principle that as production of a good increases, the oppotunity cost of producing an additional unit rises. |
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| (1) an outward shift in the production possibilties curvethat results from an increase in resource supplies or quality or an improvement in technology; (2) an increase of real output (gross domestic product) or real output per capita. |
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