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| The analysis of facts or data to establish scientific generalizations about economic behavior |
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| Involves value judgments about what the economy should be like; focused on which economic goals and policies should be implemented |
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| The limited quantiies of land, capital, labor, and entrepreneurial ability that are never sufficient to satisfy people's unlimited wants |
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| The amount of other products that must be forgone or sacrificed to produce a unit of another product |
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| That which each firm, property owner, workers, and consumer believes is best for itself and seeks to obtain |
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| The comparison of marginal (extra/additional) benefits and costs |
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| Natural Resources used to produce goods/services |
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| People's physical/mental talents and effors that are used to help produce goods and services |
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| Human-made resources (buildings, machinery) used to produce goods/services; goods that do not diretly satisfy human wants (capital goods) |
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| The human resource that combines the other resources to produce a product; makes nonroutine decisions and bears risks |
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| Production of a good in the least costly way; occurs when production takes place at which ATC is at minimum and MP of input is same for all |
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| The apportionment of resources among firms/industries to obtain the production of the products most wanted by consumers; output where MC and price/MB are equal |
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| Method that allows the prices determined in these markets to allocate the economy's scarce resources and to coordinate the decisions made by consumers, firms, and resource suppliers |
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| Method of organizing economy in which property resources are publicy owned and government uses central economic planning to direct and coordinate economic activities; communism |
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| Law of Increasing Opportunity Costs |
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| The principle that as the production of a good increases, the opportunity cost of producing an additional unit rises |
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| Law of Diminishing Returns |
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| The principle that as successive increments of a variable resource are added to a fixed resource, the MP of the variable resource will decrease |
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| The use of the resources of an individual, firm, region, nation to concentrate production on one or small number of goods/services |
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| Ability of an individual, firm, nation to produce more of a good/service than competitors using the same resources |
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| Ability of one individual, firm, nation to produce a specific product at a lower opportunity cost than competitors and is basis for specialization/trade |
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| Seperation of the work reuired to produce a product into a number of different tasks that are performed by different workers; specialization of workers |
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| The tendency of firms/resource suppliers that seek to further their own self-interests in competitive markets to also promote te interests of society |
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| Market where products are sold by firms and bought by households |
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| Market where households sell and firms buy resources or services of them |
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| Legal entity (person) chartered by a state or the government that is seperate from the owners |
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| A payment of money (or goods/services) by a government to a household or firm for which the payer recieves no good/service in returne |
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| A tax levied on the production of a specific product or on the quantity of the product purchased |
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