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| Study of the choices people make to attain goals, given their scarce resources. |
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| Simplified version of reality used to analyze real-world economic situations and the make behavioral assumptions about the motives of consumers and firms. |
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| Group of buyers and sellers of a good/service and the institution or arrangement by which they come together to trade. (Ex. Port of Long Beach or Ebay - abstract) |
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| (1) Rationally, (2) Respond to economic incentives, and (3) Optimal decisions are made at the margin. |
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| Analysis that involves comparing marginal benefits and marginal costs (Ex. Apple should produce 1 mil more iphones or Women will have more babies if gov't pay them.) |
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| Because of scarcity, producing more of one good or service means producing less of another good or service. |
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| Centrally Planned Economy |
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| Economy in which the government decides how economic resources will be allocated (Ex. Cuba) |
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| Economy in which the decisions of households and firms interacting in markets allocates economic resources. |
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| Economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources. (Ex. Gov't controls price of milk in CA) |
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| Situation in which a good or service is produced at the lowest possible cost. |
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| State of the economy in which production is in accordance with consumer preferences; in particular, every good/service is produced up to the point where the last unit provides... (find rest of definition) |
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| Both the buyer and seller of a product are made better by the transaction. |
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| Fair distribution of economic benefits (Ex. Animal Farm - pigs "some animals are more equal than others") |
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| Study of how households and firms make choices, how they interact in markets, and how the gov't attempts to influence their choice. |
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| The study of the economy as a whole including topics such as inflation, unemployment, and economic growth. |
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| (Value in the 2nd period - Value in the 1st period)/(Value in the 1st Period) all x 100 |
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