Term
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Definition
| The study of the management of scarce resources to satisfy unlimited human wants. |
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Term
| Five factors of production |
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Definition
Capital-Plant, Equip, Inventory, Residential Const. (PEIR)
Land-Natural resources
Labour-Human resources
Technology-Change in the productive process
Entrepreneurship-innovation, invention |
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Term
| Difference between goods and services |
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Definition
Good-tangible commodity
Service-intangible commodity |
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Term
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Definition
| Resources used to produce goods and services |
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Term
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Definition
| Act of making goods and services |
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Term
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Definition
| The act of using goods or services to satisfy wants |
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Term
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Definition
| Implication that choices must be made, which implies cost |
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Term
| Role of economics vs. politics |
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Definition
| Economics manages scarce factors, politics decides among desires |
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Term
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Definition
| Value of next-best alternative, subjective |
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Term
| Production possibility curve (PPC) |
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Definition
| Shows all possible combinations of production if all inputs are fully emplyed at normal utilization rate |
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Term
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Definition
| Allocation of economy's scarce resources among alternative uses |
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Term
| Four key economic pronelms |
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Definition
What is produced and how? micro
What is consumed and by whom? micro
Why are resources sometimes idle? macro
Is productive capacity growing? macro |
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Term
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Definition
| Study of causes and consequences of the allocation of resources as it is affected by the workings of the price system. |
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Term
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Definition
| Study of the determination of economic aggregates such as total output, price level, employment, and growth |
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Term
| Law of increasing marginal opportunity cost |
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Definition
| THe OC of increases as the production of X increases. |
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Term
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Definition
| Opportunity cost of producing one more unit |
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Term
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Definition
| Extra benefit from consuming one more unity |
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Term
| Where should we be on the PPC? |
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Definition
| Where marginal cost=marginal benefit |
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Term
| "Four thespians in the economic tragedy |
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Definition
Household (Consumer)
Firm (Producer)
Government
Rest of World |
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Term
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Definition
| Area over which buyers and sellers negotiate the exchange of a commodity |
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Term
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Definition
| One worker producing one product |
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Term
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Definition
| One product divided into individual tasks done by different workers |
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Term
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Definition
| Goods and services being directly traded |
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Term
| Four types of economic systems |
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Definition
1) Traditional-allocation and distribution based on custom, effective in static environment
2) Command-Central planning authority
3) Free market-Allocation and distribution by private households and firms. Decentralized price system
4) Mixed-Allocation and distribution by private and public sectors |
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Term
| Four types of economic systems |
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Definition
1) Traditional-allocation and distribution based on custom, effective in static environment
2) Command-Central planning authority
3) Free market-Allocation and distribution by private households and firms. Decentralized price system
4) Mixed-Allocation and distribution by private and public sectors |
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Term
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Definition
| Stresses efficiency and allocation of resources |
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Term
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Definition
| Stressed equity and distribution of income |
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