Term
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Definition
| things that are themselves produced and that are then used in the production of OTHER goods and services. |
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Term
| factors of production (or factors) |
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Definition
| the inputs into the process of production, aka resources |
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Term
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Definition
| the process that transforms scarce resources into useful goods and services |
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Term
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Definition
| anything provided by nature or previous generations that can be used directly / indirectly to satisfy human wants |
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Term
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Definition
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Term
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Definition
| the best alternative that we give up when we make a choice or decision |
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Term
| theory of comparative advantage |
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Definition
| Ricardo's theory that specialization and free trade will benefit all trading parties, even those that may be absolutely more efficient producers |
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Term
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Definition
| a producer has an absolute advantage over another in the production of a good or service if it can produce that product using fewer resources |
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Term
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Definition
| a producer has a comparative advantage over another in the production of a good or service if it can produce that product at a lower opportunity cost |
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Term
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Definition
| goods produced for present consumption |
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Term
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Definition
| the process of using resources to produce new capital |
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Term
| production possibility frontier (ppf) |
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Definition
| a graph that shows all the combinations of goods and services that can be produced if all of society's resources are used efficiently |
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Term
| marginal rate of transformation (MRT) |
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Definition
| the slope of the production possibility frontier (ppf) |
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Term
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Definition
| an increease in the total output of an economy. it occurs when a society acquires new resources or when it learns to produce more using existing resources |
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Term
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Definition
| an economy in which a central government either directly or indirectly sets output targets, incomes, and prices |
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Term
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Definition
| "allow them to do"; an economy in which individual people and firms pursue their own self-interests without any central direction or regulation |
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Term
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Definition
| the institution through which buyers and sellers interact and engage in exchange |
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Term
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Definition
| the idea that consumers ultimately dictate what will (or will not) be produced by choosing what to purchase (and what not to purchase) |
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Term
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Definition
| the freedom of individuals to start and operate private businesses in search of profits |
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Term
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Definition
| products of nature, or things like buildings or equipment, or human workforce with people's talents, skills, and knowledge |
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Term
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Definition
| anything that has already been produced that will be used to produce other valuable goods |
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Term
| law of increasing oppportunity cost |
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Definition
| when over time, the opportunity cost to produce certain outputs increases |
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Term
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Definition
| the discovery and application of new, more efficient production techniques |
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Term
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Definition
| the amount that a household earns each year |
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Term
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Definition
| amount that households have accumulated out of past income through saving or inheritance |
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Term
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Definition
| prices of various kinds of labor |
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Term
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Definition
| another name for microeconomic theory |
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