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| the condition whereby the resources we use to produce goods and services are limited relative to our wants for them |
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| The social science concerned with how individuals, institutions and society make optimal choices under conditions of scarcity |
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| =economic good= good for which you CANNOT get all you want at zero COST |
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| opposite of scarce good; you can get all you want at zero cost |
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| Signal that tells producers what and how much to produce; in a standard market transaction it is paid by the consumer |
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| The sacrifice associated with making a choice; in a standard market transaction it is paid by the producer |
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| Out-of-pocket monetary payments |
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| Implicit/Opportunity cost |
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Definition
| most valued option forgone (what you give up) |
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| the inputs used in the production of goods and services; aka factors of production |
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| the satisfaction a consumer obtains from the consumption of a good or service |
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| additional; the change that results from an additional unit |
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| Statements about economic behavior or the economy that enable prediction of the probable effects of certain actions |
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| A simplified representation of how something works |
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| Any institution that brings together buyers and sellers of a particular good or service |
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| Households demand goods and services which are supplied by firms in exchange for money |
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| Firms demand resources which are supplied by households in exchange for money |
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| a table that shows how much of a good or service consumers will want to buy at various prices |
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Definition
| the price of a good and the quantity demanded are inversely related |
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| A line that shows the maximum that consumers are willing to pay for any quantity |
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| the relationship between p and qd for all possible prices |
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| the number of units consumers are willing to buy at a specific price |
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| Change in the quantity demanded |
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Definition
| a change in the amount purchased caused by a change in the price; a movement along the curve |
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| a shift of the entire curve to the left of right |
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| goods for which income and demand move together |
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| goods for which income and demand move opposite |
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| goods that take the place of each other in consumption; the price of one good and the demand for the other good move together |
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Definition
| goods that are used together in consumption; The price of one good and the demand for the other good move opposite |
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| A table that shows how much of a good or service producers will offer for sale at various prices |
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Definition
| the price of a good and the quantity supplied are directly (positively) related |
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| a line that shows the minimum that producers are willing to accept as payment for and quantity |
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| The relationship between P and Q for all possible prices |
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Definition
| the number of units producers are willing to offer for a sale at a specific price |
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| Change in Quantity supplied |
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Definition
| a change in the amount offered for sale caused by a change in the price; movement along the curve |
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Definition
| a shift of the entire curve to the left or right |
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| the production process of changing resources into goods and services |
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| Price at which the market clears (Qs=Qd); no tendency for change |
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| at prices above Pe, Qs>Qd; put downward pressure on prices until it is eliminated |
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| at prices pe, Qd>Qs; Put upward pressure on prices until it is eliminated |
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| the allocation of goods among consumers using prices |
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| willingness to pay-amount paid |
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| the maximum price at which a consumer will buy a good |
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| amount received- willingness to accept |
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| the minimum price at which a producer will sell a good |
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