Term
| Authority or Command System |
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Definition
| An economic system that is controlled by a central authority which owns and allocates resources. |
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Definition
| The manufactured resource. The tools and equipment that aid in production. |
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Definition
Gaining the most output to maximize consumer utility with a given amount of input. |
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| This is the entity in a market economy that combines ladn labor and capital into a finished product or service. |
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Definition
| The basic economic resoursce that are required in production-land, labor, capital and entrepreneural ability. |
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Definition
| The human condition where wants are incapable of complete satisfaction. |
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Definition
the human resource. A certain amount of labor is required to produce and resource. |
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Definition
| the natural resources that are required to produce any product. |
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Definition
| System that allows free interaction between buyer and seller in the market place. It is characterized by private ownership of resources. |
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Definition
| Due to scarcity, the choice of one product means giving up something else. It is the alternative not chosen. |
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Term
| Production Possibilities Curve |
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Definition
| A model that shows the trade-off that exists between two goods or services that could potentially be produced by a full-employement, full output economy assuming that all other resources are fixed. |
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Definition
| gaining the most output with a given amount of input but not relating output to consumer utility. |
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Term
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Definition
| the contrast between virtually unlimited human wants and the limited availability of resources. |
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Term
| The Four Questions of Allocation |
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Definition
| Every society must decide what to product, how much to produce, how to distribute wealth(for whom) and ways to insure efficiency within the economy. |
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Term
| Traditional Economic System |
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Definition
| As system that allow prevailing customs to determine the allocation of resources. |
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Term
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Definition
| Economics is the study of the choices, methods or systems used by societies to allocate scarce resources. |
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Term
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Definition
| The fallacy of composition exists when we conclude that something that is appropriate for an individual must be also appropriate for society. Example: If it is good for the individual it must be good for the overall economy. |
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Definition
| Comparing the marginal (extra) costs to the marginal (extra) benefits as an aid to decision making. Example: Is the extra (marginal) benefit of a college degree greater than the marginal cost? |
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Term
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Definition
| Microeconomics is a study of the allocation of resources in smaller units, specifically the individual consumer and the individual business unit or firm. |
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Term
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Definition
| The description of the economy where opinion is utilized and value judgments are made. Example: because of government’s effective use of fiscal policy, unemployment has fallen to only 5.5%. |
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Term
| Opportunity Cost Analysis |
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Definition
| Anytime we receive a benefit from use of a resource, it comes at a cost because we could have used that resource for a different opportunity. All of our decisions come at a cost and this cost is compared to the benefit we receive in deciding if we should undertake the action. |
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Definition
| Policy Economics is the application of the principles of economics to government policy actions. Government seeks to understand economic activities in order to influence economic activity. |
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Definition
| The description of an economy by stating facts or using specific data. No opinion is involved. Example: the unemployment rate is 5.5%. |
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Definition
| The study of Economics involves the use of a logical pattern of thinking as well as analytical tools of analysis. |
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Term
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Definition
| Economists consider the variable relationships in their analysis with an emphasis on considering the relationship of one variable at a time. This is called ceteris paribus (Latin translated as meaning one at a time). Each variable is evaluated relative to itself rather than in combination with many other variables |
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Definition
| a schedule showing a series of prices and quantities that consumer would be willing and able to buy at a specific point in time. |
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Term
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Definition
| changes in tastes, income, numbers of buyers, and related goods which cause a fundamental change in the way that consumers view a particular product or service. |
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Term
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Definition
| changes in resource prices, technology, expectations, related goods, taxes and subsidies or the number of producers which cause a fundamental change in the way that producers view a particular product or service. |
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Term
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Definition
| that point in an individual market where quantity demanded equals quantity supplied. It is always where the curves cross-the market is cleared with no surplus or shortage |
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Term
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Definition
| this law assumes an inverse relationship between price and quantity. At a higher price, quantity demanded declines-at a lower price the quantity increases. |
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Term
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Definition
| this law assumes a direct relationship between price and quantity. At a higher price, producers will produce more. At a lower price the quantitly will decline. |
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Term
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Definition
| the quantity demanded is greater that the quantity supplied. |
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Term
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Definition
| the quantity supplied is greater that the quantity demanded. |
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Term
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Definition
| where buyers and sellers meet. It provided for the free interation of buyer and seller in the market place. |
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Term
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Definition
government sets a price that is below the equilibrium price |
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Term
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Definition
| government sets a price above the equilibrium price. |
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Term
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Definition
| in a market, price measures scarcity. If the product is more scarce, price goes up—less scarce, it will go down. Price is an important meachanishm for allocating scarce resources in a market. |
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Term
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Definition
| a large number of independantly acting buyers and seller in a market place where no one producer can unduly effect that market. |
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Term
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Definition
| on a demand schedule, this is one amount that corresponds to one price. A change in price will change the quantity demanded. |
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Term
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Definition
| on a supply schedule, this is one amount that corresponds to one price. A change in price will change the quantity supplied. |
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Term
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Definition
| a schedule showing a series of prices and quantities that producers would be willing and able to supply at a specific point in time. |
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Term
| _____________ costs are present in a PPF/PPC when resources are not perfectly shift-able from one product to another (Example: from beef production to wine production). |
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Definition
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Term
| Robert Owen viewed social systems as primary in determining economic activity and he believed that ________ must be subordinated through government intervention. |
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Definition
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Term
| Any point outside a specific PPC/PPF describes a combination of goods which is not attainable (not sustainable) for a ______ run of production. |
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Definition
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Term
| The transition away from ___________________ systems began as the manor life yielded to the city life in the 17th and 18th centuries in Europe. |
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Definition
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Term
| One of the current widely used models for visualizing economic allocation is the __________________________ . |
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Definition
| Production Possibilities Curve (also know as the PPF) |
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Term
| A _____________ system involves a strong central authority making all choices and decisions relative to the economy. |
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Definition
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Term
| One of the Four Questions of Allocation is ______________ . This question is largely answered in a market economy by individual productivity. |
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Definition
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Term
| The beginnings of academic thought about the Market economy can be found in _____________ . |
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Definition
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| Keynesian Theory was challenged beginning in the 1970’s by ___________ and other related New Classical Theories. |
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Definition
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Term
| David Ricardo’s most significant theory was ______________ , arguing that a nation will gain through trade by producing what is most efficient and exchanging with other nations. |
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Definition
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Term
In order to produce ________ economic good(s) or service(s) there must be some use of a land resource, either direct or derived.
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Definition
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| The Production Possibilities Model (or Curve/Frontier –PPC/PPF) assumes a constant ____________ as well as constant technology and resources. |
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Definition
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Term
| ____________ is the spending for Capital goods and must come from savings in a pervious time period. |
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Definition
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Term
| The ____________ Anti-Trust Act was passed in 1890 to restrain the monopoly power which had been created in some sectors of the U.S. economy. |
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Definition
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Term
| _____________ costs are present in a PPF/PPC when resources are not perfectly shift-able from one product to another (Example: from beef production to wine production). |
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Definition
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Term
| _________ is not a factor of production. |
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Definition
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Term
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Definition
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Term
The evolution toward the ________________ system occurred in a gradual process as societies adapted to new technologies and the need for skilled labor.
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Definition
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Term
| One of the Four Questions of Allocation is ______________. Within a market economy this decision is made by consumer sovereignty, i.e. consumer wants. |
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Definition
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Term
| “Opportunity Cost” is best illustrated by the PPF/PPC with a movement from one point ________ the frontier (curve) to another point _________ the curve. |
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Definition
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Term
| __________ viewed social systems as primary in determining economic activity and he believed that technology must be subordinated through government intervention. |
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Definition
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Term
| The Depression of the __________ caused many to loose confidence in traditional classical theories of economics. |
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Definition
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Term
| The _____________________ assumes that a nation has only two goods and they are graphed with varying combinations along the X and Y axis. |
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Definition
| Production Possibilities Curve (also know as the PPF) |
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Term
| The Production Possibilities Model (or Curve/Frontier –PPC/PPF) assumes a constant timeframe as well as constant _____________________ . |
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Definition
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Term
| A point slightly outside a specific PPC/PPF describes a combination of goods which is ______________ for the short run by working resources in an “overtime” mode. |
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Definition
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Term
| ____________ approaches brought stability to the social as well as the economic system, but did not allow for much progress or change. |
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Definition
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Term
| A new theory suggesting more government intervention emerged from ___________ during the 1930’s and became widely accepted in the 1950’s and 1960’s. |
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Definition
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Term
| _________________ is the production of that combination of goods that consumers’ desire the most (maximum utility) given a fixed amount of resource input. |
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Definition
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Term
| ___________ believed that Utopian Socialism was a remedy for poverty. |
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Definition
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Term
| The subject of resource allocation was first considered in a comprehensive manner by _______________. |
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Definition
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Term
| Silicon and other basic elements used to make computer chips are derived from the factor of production we call __________ . |
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Definition
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Term
| David Ricardo’s most significant theory was ______________ , arguing that a nation will gain through trade by producing what is most efficient and exchanging with other nations. |
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Definition
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Term
| what are the 4 questions of allocation? |
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Definition
1. what to produce
2. how to produce
3. who to produce for
4.efficency and power |
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Term
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Definition
The standard of living in a society is ultimately determined by the amount of
resources that are available and how effi ciently they are used.
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Term
| what are the factors of production |
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Definition
| labor, capital, land, and entrepreneurship |
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Term
In order to produce and deliver any economic
good or service, there must be some use of natural resources.
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Definition
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Term
The term economic (or “real”) capital
describes the tools, facilities and equipment that aid in the production of all
products and services.
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Definition
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Term
| what are the 3 economic systems? |
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Definition
| traditional, command, & market |
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Term
In a _____________
economic system the basic resources were
allocated by the customs and folkways long
used by a particular society or culture.
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Definition
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Term
which involved a strong
central government or leader making all decisions relative to resource allocation.
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Definition
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Term
Within this system, the choices of producers
and consumers interact to determine the allocation of the four basic
resources.
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Definition
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Term
father of economics,His best-known work, An Inquiry into
the Nature and Causes of the Wealth of Nations, was published in 1776 and
provided the theoretical foundation of free-market economics. |
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Definition
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Term
the “Worldly Philosophers” of 18th and 19th
century economics held widely varied but infl uential views on markets and
governments
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Definition
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Term
His most signifi cant theory was comparative
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advantage, which argued that a nation will gain through trade by specializing
in the good which it produces most effi ciently.
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Definition
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Term
became well known for his economic
views that population grew geometrically (i.e., 2, 4, 8, 16, etc.) while
food production grew only arithmetically (i.e., 1, 2, 3, 4, etc.). Thus, he predicted
that economic activity would evolve in cycles of misery and catastrophe.
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Definition
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Term
was a Welsh utopian socialist
who believed that socialism was a remedy for the poverty of the period.
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Definition
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Term
Within his Communist
Manifesto, published in 1848, he argued that capitalism itself would
lead to socialism and then to communism as armies of unemployed workers
would force economic change and a complete takeover of the economic
system by the government.
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Definition
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Term
| Economics is the study of the _______ that we make in the allocation of scarce resources. |
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Definition
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Term
| In choosing whether or not to go to a particular concert ... if the ___________ the marginal cost, then it would be “rational” to go. |
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Definition
| marginal benefit (marginal utility) gained is greater than |
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Term
| A real cost of choosing to attend a concert is not only the out-of-pocket $ $ $ cost, but also the ________________ (lost wages or maybe extra sleep). Every activity we undertake requires us to not pursue other opportunities. |
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Definition
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Term
| __________ is when more money is paid for the same amount of goods and services than in a previous time period. |
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Definition
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Term
| Allocation of resources within the capitalistic system is accomplished through a ________ approach where buyers and sellers meet. |
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Definition
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Term
| The result of a change in Quantity Demanded as ________ change is shown by a movement along the demand line. |
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Definition
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Term
| As a person continues to consume more of an item, ________ s/he will get less additional satisfaction (utility). |
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Definition
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Term
The meeting place for the buyer and seller.
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Definition
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Term
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Definition
| descriptive, tabular, graphic |
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Term
series of prices and individual quantities that
A series of prices and individual quantities that consumers are willing and able to buy at a particular point in time.
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Definition
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Term
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Definition
| tastes & preferences, number of buyers, expectations, income, related goods |
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Term
•A series of prices and individual quantities that producers are willing and able to produce at a particular point in time.
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Definition
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Term
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Definition
| technology, taxes & subsides, number of sellers, resource prices & availability, expectations, related goods |
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Term
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Definition
Quantity demanded equals quantity supplied, no surplus no shortage--market is cleared, the curve crosses
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Term
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Definition
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Term
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Definition
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Term
assumes there is an inverse relationship between price and
the quantity demanded.
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Definition
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Term
The amount of a product that consumers are willing and
able to purchase at a particular price is called the
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Definition
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Term
income
effect,substitution effect,law of diminishing
marginal utility
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Definition
three reasons why price and quantity demanded have an inverse
relationship
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Term
If the price of item A, a substitute for item B, decreases, then people will buy
more of A and less of B. Thus, the quantity demanded of A will increase when
its price decreases.
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Definition
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Term
| law of diminishing marginal utility |
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Definition
Economists assume that at any given price a person
will continue to consume more and more of an item, but at some point that
person starts receiving less and less additional satisfaction (utility) from each additional unit consumed. Therefore, beyond some point, the consumer will
only purchase more of that item if the price of that item decreases.
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Term
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Definition
If price decreases, a consumer is willing to buy more at the lower price.
At lower prices, the consumer has more purchasing power. |
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Term
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Definition
A Demand line may shift right, representing an increase in a demand behavior,
or shift left, representing a decrease in that demand behavior.
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Term
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Definition
sometimes called “superior goods”) are items that
consumers will instinctively increase their purchases of when they have an
increase in income.
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Term
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Definition
is one that consumers will buy less of when their incomes
increase for example used car
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Term
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Definition
Two products that are viewed as replacements for each other such as coke and pepsi
-a change in the price of one will cause a
change in the demand of the other in the same direction |
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Term
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Definition
-Two goods that are purchased and consumed together shoe and shoe laces
-a change in the price of one will cause a change in the
demand of the other in the opposite direction |
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Term
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Definition
If price increases, then the quantity supplied will also
increase.
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Term
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Definition
| quantity on y, price on x |
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Term
| When prices are ____________, greater quantities will be provided by producers at all price levels all other things remaining the same. |
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Definition
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Term
| The market clearing price where the quantity demanded by consumers equals the ____________ by producers. |
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Definition
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Term
| ____________ is defined as the quantity of goods and services that consumers are willing and able to purchase as a function of prices. |
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Definition
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Term
| If market price is below the equilibrium price, this will result in a ________. |
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Definition
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Term
| If consumers expect prices to increase in the future, they would ________ their demand for an item now. |
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Definition
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Term
| The market is cleared by finding a _________ at which producers are willing and able to supply and consumers are willing and able to buy. |
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Definition
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Term
| If the prices in the near future are expected to increase, ______ will be produced at each present price (shift right) in order to increase inventories. |
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Definition
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Term
| If a larger supply is demanded by consumers, suppliers are often able to ____________ the product price and provide a larger quantity. |
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Definition
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Term
| If there is a shortage, suppliers will _________ their prices until the market price comes to equilibrium where quantity supplied is equal to the quantity demanded. |
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Definition
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Term
| If people have ______ income, they will purchase more of a “normal”good. |
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Definition
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Term
| A minimum wage law (a price floor) increases the quantity of labor supplied, but reduces the quantity of labor demanded resulting in a(n) __________ of labor. |
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Definition
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Term
| The ______________ price ensures that those willing to pay that price will be given the product. |
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Definition
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Term
| Allocation of ____________ within the capitalistic system is accomplished through a market approach where buyers and sellers meet. |
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Definition
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Term
| ________________ is characterized by a very large number of both independent buyers and independent sellers resulting in the maximum possible competition. |
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Definition
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Term
| If price decreases, a consumer is willing to buy __________. |
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Definition
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Term
| Examples of two goods that are complementary are software and hardware of computers. If the price of computers were to increase, then _______ software will be purchased at every price level. |
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Definition
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Term
| When producers' costs decrease, there will be _______ product (shift right) at each price brought to the market. |
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Definition
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Term
| When prices are ____________, greater quantities will be provided by producers at all price levels all other things remaining the same. |
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Definition
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Term
| In a market system, producers are continually seeking new opportunities to__________________. |
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Definition
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Term
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Definition
where the quantity demanded by consumers becomes exactly equal to the
quantity supplied by producers.
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Term
| Prices function as a ____________ mechanism in determining the amount of product supplied and demanded. |
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Definition
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Term
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Definition
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Term
| Fewer suppliers of airline transportation will shift the supply line _________. |
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Definition
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Term
The quantity demanded is less than the quantity supplied at a market price __________ equilibrium price resulting in a surplus.
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Definition
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Term
| In pure competition those producers willing to accept the equilibrium price, will have _______ of their product sold. |
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Definition
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