Term
|
Definition
| Society has limited resources and therefore cannot produce all the goods and services people wish to have |
|
|
Term
|
Definition
| the study of how society manages its scarce resources |
|
|
Term
|
Definition
| society is getting the maximum benefits from its scarce resources |
|
|
Term
|
Definition
the opportunity cost of an item is what you give up to get that item
example: college athletes who can earn millions drop out of school and play professional sports |
|
|
Term
|
Definition
people that orderly do the best they can to achieve their objectives, given the opportunites they have
example: consumers who buy a bundle of goods and services to achieve the highest possible level of satisfaction |
|
|
Term
|
Definition
small changes to an existing plan of action
|
|
|
Term
|
Definition
something (such as a punishment or reward) that induces a person to act
|
|
|
Term
|
Definition
| An economy that operates by voluntary exchange in a free market and is not controlled by a central authority |
|
|
Term
|
Definition
the ability of an individual to own land and exercise control over scarce resources
example:our rights over the things we produce |
|
|
Term
|
Definition
a situation in which a market left on its own fails to divide resources easily
|
|
|
Term
|
Definition
the impact of one person's actions on the well being of a bystander
example: pollution |
|
|
Term
|
Definition
| the ability of a single person to influence market prices |
|
|
Term
|
Definition
| the amount of goods and services produced from each hour of a worker's time |
|
|
Term
|
Definition
| an increase in the overall level of prices in the economy |
|
|
Term
|
Definition
| the irregular fluctuations in economic activity such as employment and production |
|
|
Term
|
Definition
| a visual model of the economy that shows how dollars flow through markets among households and firms |
|
|
Term
| Production Possibilities Frontier |
|
Definition
| a graph that depicts the trade-off between any two items produced. |
|
|
Term
|
Definition
| the study of how households and firms make decisions and how they interact in specific markets |
|
|
Term
|
Definition
| claims that attempt to describe the world as it is |
|
|
Term
|
Definition
| claims that attempt to prescribe how the world should be. Cannot be judged using data alone |
|
|
Term
|
Definition
| the study of economy-wide phenomena including inflation, unemployment, and economic growth |
|
|
