Term
| "one who manages a household" |
|
Definition
|
|
Term
| refers to the fact that every society in the world has limited resources and therefore cannot produce all the goods and services that people wish to have. Because resources are limited, products that can be produced with those resources are also limited |
|
Definition
|
|
Term
| a social science that seeks to understand how societies allocate their limited resources to satisfy unlimited human wants |
|
Definition
|
|
Term
| What century was economics established? |
|
Definition
|
|
Term
| Who established economics? |
|
Definition
|
|
Term
| What idea did classical economists embrace in the 18th century? |
|
Definition
|
|
Term
| What are the three fundamental questions? |
|
Definition
1. What to produce?
*Choices about the types of products-outputs- to be produced*
2. How to produce?
*Choices about the resource -inputs- usage*
3. For whom to produce?
*Choices about the distribution of goods and services -outputs-* |
|
|
Term
| resources used by firms in their production processes to make outputs. |
|
Definition
| Inputs (factors of production) |
|
|
Term
| What are the four fundamental economic resources? |
|
Definition
1. Land (farmland, industrial site, mineral deposits)
2. Labor (accounting skills, landscaping skills)
3. Capital (machinery, computers, buildings)
4. Entrepreneurship (Bill Gates) |
|
|
Term
| goods and services that are either consumed (i.e. hamburger) or used for further production (i.e. ground meat used to make a hamburger.) |
|
Definition
|
|
Term
| if outputs are consumed they are called ________? |
|
Definition
|
|
Term
| if outputs are used in the production of another product they are called _________? |
|
Definition
| intermediate goods and servcices |
|
|
Term
| principle that actions should be taken only if added -incremental- benefit is greater than added -incremental- cost. |
|
Definition
|
|
Term
| People make decisions by weighing costs and benefits, their decisions are likely to change in response to changes in costs and benefits. |
|
Definition
|
|
Term
True/False
Everybody benefits from trade. |
|
Definition
|
|
Term
True/False
Somebody's gain is somebody else's loss. |
|
Definition
|
|
Term
| an economy which allocates resources through the decentralized decisions of market participants |
|
Definition
|
|
Term
| a good way to organize economic activity |
|
Definition
|
|
Term
| government intervention can be most useful when there is ________. |
|
Definition
|
|
Term
| a situation in which a market left on its own fails to allocate society's scarce resources efficiently |
|
Definition
|
|
Term
| Two Examples of Market Failure |
|
Definition
Externalities
Market Power |
|
|
Term
| occur when one person's actions in the market impact the well-being of third parties who, unwillingly, receive a benefit or incur a cost |
|
Definition
|
|
Term
| the ability of a single economic unit or a group of units to have a substantial influence on market prices. It is important to understand that this principle states that the government can IMPROVE market driven economic outcomes. |
|
Definition
|
|
Term
| the amount of output per unit of input utilized in production. |
|
Definition
|
|
Term
| this is very important in the long run in improving a nation's standard of living. |
|
Definition
|
|
Term
| occurs when overall prices in the economy rise. |
|
Definition
|
|
Term
| reduces the purchasing power of some of our assets such as cash in our pockets or in our checking accounts. This happens when the government creates too much money. |
|
Definition
|
|
Term
| a curve that shows the inverse relationship between the unemployment rate and the inflation rate. Normally downward sloping |
|
Definition
|
|
Term
| a statement about cause and effect, action and reaction in economic life. It is a deliberate simplification of relationships used to explain how they work (i.e. the theory of supply and demand) |
|
Definition
|
|
Term
| a formal statement (usually a mathematical statement) of a theory. It is a small-scale version of some aspect of the economy. (i.e. Quantity Demanded= 20,000-500xPrice) |
|
Definition
|
|
Term
| an illustration of a mathematical relationship between variables. It is a picture of an economic model. |
|
Definition
|
|
Term
| a measure that can change from time to time, or from observation to observation (i.e. the price of a product) |
|
Definition
|
|
Term
| simply means omitting, ignoring details. |
|
Definition
|
|
Term
| model of the economy that shows how dollars, inputs, outputs flow through goods and services, and inputs markets among households and firms. |
|
Definition
|
|
Term
| model that shows various combinations of goods and services that can be produced given the available resources and the technology |
|
Definition
| The Production possibility frontier |
|
|
Term
| statements that attempt to describe the world as it is. Therefore are descriptive (i.e. minimum wage laws reduce employment opportunities for low-income earners) |
|
Definition
|
|
Term
| statements that attempt to describe how the world ought to be. Therefore are prescriptive (i.e. the government should reduce the budget deficit by raising taxes or decreasing its spending) |
|
Definition
|
|
Term
| a graph on which the value of one variable is plotted against the value of another variable |
|
Definition
|
|
