Term
|
Definition
| Total amounts of quantitiesl aggregate demand, for example, is total planned expenditures throught a nation. |
|
|
Term
|
Definition
| the assumption that people do not intentionally make decisions that would leave them worse off. |
|
|
Term
|
Definition
| reyling on real-world data in evaluating the usefulness of a model. |
|
|
Term
| Ceteris paribus assumption |
|
Definition
| the assumption that nothing changes except the factor or factors being studied. |
|
|
Term
| Diff b/w Positive/Normative economics |
|
Definition
Positive: statement with "what is"
Normative: statement with "what ought to be" |
|
|
Term
|
Definition
| A situation in which the ingredients for producing the things that people desire are insufficient to satisfy all wants. |
|
|
Term
|
Definition
| Any activity that results in the conversion of resources into products that can be used in consumption. |
|
|
Term
|
Definition
| The natural resources that are available from nature. Includes location, climate, water, vegetation, ect. |
|
|
Term
|
Definition
| productive contributions of humans who work, involving both mental and physical activities. |
|
|
Term
|
Definition
| All manufactured resources, including buildings, equipment, machines, and imporvements to land that is used for production. |
|
|
Term
|
Definition
| The accumulated training and education of workers |
|
|
Term
|
Definition
| The factor of production involving human resources that perform the functions of raising capital, organizing, managing, assembling other factors of production, and making basic business policy decisions. |
|
|
Term
|
Definition
| All things from which individuals derive satisfaction or happiness. |
|
|
Term
|
Definition
| Goods that are scarce, for which the quantity demanded exceeds the quantity supllied at a zero price. |
|
|
Term
| Production possibilities curve |
|
Definition
| A curve representing all possible combinations of total output that could be produced assuming a fixed amount of productive resources of a given quality and the efficent use of those resources. |
|
|
Term
| Law of increasing relative cost |
|
Definition
| The observation that the opportunity cost of additional units of a good generally increases as society attempts to produce more of that good. This accounts for the bowed-out shape of the production possiblities curve. |
|
|
Term
|
Definition
| The segregation of a resource into different specific tasks. |
|
|
Term
|
Definition
| The observation that there is a negative, or inverse, relationship between the price of any good or service and the quanitity demanded, holding other factors constant. |
|
|
Term
|
Definition
| The price of one commodity divided by the oprice of another commodity; the number of units of one commodity that must be sacrificed to purchase one unit of another commodity. |
|
|
Term
|
Definition
| A graphical representation of the demand schedule; a negatively sloped line showing the inverse relationship between the price and the quantity demanded. |
|
|
Term
|
Definition
| The demand of all consumers in the marketplace for a particular good or service. The summation at each price of the quantity demanded by each individual. |
|
|
Term
|
Definition
| Goods for which demand rises as income rises. Most goods are normal goods. |
|
|
Term
|
Definition
| Goods for which demand falls as income rises. |
|
|
Term
|
Definition
| the price where the demand curve intersects the supply curve. The situation when quanitity supplied equals quanitity demanded at a particual price. |
|
|
Term
|
Definition
| A situation in which the quanitity demanded is greater than the quantity supplied at a price below the market clearing price. |
|
|
Term
|
Definition
| A situation in which the quanitity supplied is greater than quanitity demanded at a price above the market clearing price. |
|
|
Term
|
Definition
| The conditions under which trading takes place. Usually, the terms of exchange are equal to the price at which a good is traded. |
|
|
Term
|
Definition
| An economic system in which relative prices are constantly changing to reflect changes in supply and demand for different commodities. The prices of those commodities are signals to everyone within the system as to what is relatively scarce and what is relatively abundant. |
|
|
Term
|
Definition
| a situation in which an unrestrained market economy leads to too few or too many resources going to a specific economic activity. |
|
|
Term
|
Definition
| A consequence of an economic activity that spills over to affect third parties. Pollution is an externality. |
|
|
Term
|
Definition
| Parties who are not directly involved in a given activity or transaction. |
|
|
Term
|
Definition
| goods that can be consumed by only one individual at a time. Private goods are subject to pinciple of rival consumption. |
|
|
Term
|
Definition
| Goods for which the principle of rival consumption does not apply; they can be jointly consumed by many individuals simultaneously at no additional cost and with no reduction in quality or quantity. Also no one who fails to help pay for the good can be denied the benefit of the good. |
|
|
Term
|
Definition
| the principle that no one can be excluded from the beneftis of a public good, een if that person has not paid for it. |
|
|
Term
|
Definition
| a good that has been deemed socially desirable/undesirable through the political process. |
|
|
Term
|
Definition
| a tax system in which, regardless of an individual's income, the tax bill comprises exactly the same proportion. |
|
|
Term
|
Definition
| a tax system in which, as income increases, a higher percentage of the additional income is taxed. The marginal tax rate exceeds the average tax rate as income rises. |
|
|
Term
|
Definition
| a tax system in which as more dollars are earned, the percentage of tax paid on them falls. The marginal tax rate is less than the average tax rate as income rises. |
|
|
Term
|
Definition
| The positive/negative difference b/w the purchase price and the sale price of an asset. |
|
|
