Term
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Definition
unlimited wants exceed the limited resources available to fulfill those wants |
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Term
| What are the three ways to behave irrationally |
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Definition
1. breaking the transitive property
2. intentionally limiting one's options
3. intentional self-sabotage |
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Term
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Definition
1. People are rational
2. People respond to incentives
3. Optimal decisions are made at the margin |
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Term
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Definition
| compares marginal benefit & marginal costs |
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Term
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Definition
| to partake in any action, we have to give up something |
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Term
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Definition
| the HIGHEST-VALUED alternative that must be given up to engage in an activity (or produce a good) |
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Term
| Centrally-planned economy |
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Definition
| the government decides how economic resources will be allocated |
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Term
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Definition
| decisions of hoouseholds and firms interacting in markets leads to the allocation of goods & services |
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Term
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Definition
| most economic decisions result from the interaction of buyers & sellers in markets but the government plays a significant role in the allocation of resources |
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Term
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Definition
| producing in the best way possible at the cheapest price possible |
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Term
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Definition
production is in accordance with consumer preferences
--->
making goods consumers actually want to buy
(Marginal cost = Marginal benefit) |
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Term
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Definition
experiencing productive & allocative efficiency
the "right bundle" |
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Term
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Definition
what the world "is"
FACTS |
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Term
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Definition
what the world ought to be
OPINION |
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Term
| Productions Possibilities Frontier |
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Definition
shows maximum attainan\ble combos of TWO products |
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Term
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Definition
| producing MORE of a good or service than competitors |
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Term
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Definition
| producing a good or service at a LOWER COST than competitors |
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Term
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Definition
| markets for the factors of production: labor, cpital, resources |
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Term
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Definition
| amount of a good or service a consumer is willing & able to purchase at a given price |
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Term
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Definition
| demand by all consumers at a given price |
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Term
| Ddemand curves show relationship between: |
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Definition
| Price of a product & Quantity demanded |
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Term
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Definition
Prices rise; Quantity demand falls
Price falls; Quantity demand rises |
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Term
| Price of Good A increases , buy fewer Good B |
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Definition
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Term
| Price of Good A increases, demand for Goo db increases |
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Definition
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Term
| Quantity demanded changes when: |
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Definition
| there is a change in prices |
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Term
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Definition
Prices increase; Quantity supplied increases
Prices decrease; Quantity supplied decrease |
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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
| Change in Quantity Demanded |
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Definition
| Quantity consumed changed |
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Term
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Definition
| Change in quantity supplied |
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