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the amount of other products that must be forgone or sacrificed 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
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| the comparison of marginal 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 and testing of hypotheses to obtain theories principles, and laws. |
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| a widely accepted generalization 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 |
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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 resource prices |
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| The part of economics concerned with the economy as a whole; with such major aggregates as the household, business, and government sectors; and with measures of the total economy |
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| a collection of specific economic units treated as if they were one. For example, all prices of individual goods ad services are combined into a price level, or all units of output are aggregated 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 judgments about what the economy should be like; focused on which 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 available 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’ prices |
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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 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 used to produce goods and services; goods that do not directly satisfy human wants; also called capital goods |
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| spending for the production and accumulation of capital and additions to inventory |
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| the human resources that combine the other resources to produce a product, makes nonroutine decisions, innovates and bears risk |
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| products and services that satisfy human wants directly |
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| Production possibility curve |
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| a curve showing the different combinations of two goods or service that can be produced in a full employment, full production economy where the available supplies of resources and technology are fixed |
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| Law of increasing opportunity costs |
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| the principle that as the production of a good increase, the opportunity cost of producing an original unit rises |
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| 1() an outward shift in the production possibility curve that results from an increase in resource supplies or quality or an improvement in technology; (2) an increase of real output or real output per capita |
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| a particular set of institutional arrangements and a coordinating mechanism for solving the economizing problem; a method of organizing an economy |
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| a method of organizing an economy in which property resources are publicly owned and government uses central economic planning to direct and coordinate economic activities |
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| all the product and resource markets of a market economy and the relationships among them; a method that allows the prices determined in those markets to allocate the economy’s scarce resources and to communicate and coordinate the decisions made by consumers, firms, and resource suppliers |
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| the right of private persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other property |
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| the freedom of firms to obtain economic resources, to use those resources to produce products of the firm’s own choosing and to sell their products in markets of their choice |
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| the freedom of owners of property resources to employ or dispose of them as they see fit, of workers to enter any line of work for which they are qualified and of consumers to spend their incomes in a manner that they think is appropriate |
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| that with each firm, property owner, worker, and consumer believes is best for itself and seeks to obtain |
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| the presence in a market of independent buyers and sellers competing with one another along with the freedom of buyers and sellers to enter and leave the market |
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| any institution or mechanism that brings together buyers (demanders) and sellers (suppliers) of a particular good or service |
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| the use of resources of an individual, a firm, a region, or a nation to concentrate production on one or a small number of goods and services |
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| the separation of the work required to produce a product into a number of different tasks that are performed by different workers |
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| – any item sellers generally accept and buyers generally use to pay for a good or a service,; money; a convenient means of exchanging goods and services without engaging in barter |
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| the exchange of one good or service for another good or service |
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| any item that is generally acceptable to sellers in exchange for goods and services |
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| determination by consumers of the types and quantities of goods and services that will be produced with the scarce resources of the economy; consumer’s direction of production through their dollar votes |
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| the votes that consumers and entrepreneurs cast for the production of consumer and capital goods, respectively, when they purchase those goods in product and resource markets |
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| the hypothesis that the creation of new products and production methods simultaneously destroys the market power of existing monopolies |
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| – the tendency of firms and resource suppliers that seek to further their own self-interests in competitive market s to also promote the interests of society |
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| an illustration showing the flow of resources from households to firms and of products from firms to households. These flows are accompanied by reverse flows of money from firms to households and from households to firms |
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| a market in which households sell and firms buy resources or the services of resources |
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| a market in which products are sold by firms and bought by households |
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