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Definition
shows the flow of goods and services, factors of production, and monetary payments between Households and Firms. |
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Definition
| Sell the factors of production; land, labor, and capital to Firms. |
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Term
| Households use these dollars to......? |
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Definition
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Term
| Firms use this revenue to pay for.......? |
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Definition
| the factors of production. |
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Term
PRODUCTION POSSIBILITIES FRONTIER? |
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Definition
a graph that shows the combination of output the economy can possibly produce given the available factors of production and the available production technology. |
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Term
| If the economy is operating on the Production Possibilities Frontier, it is.....? |
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Definition
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Term
| Points outside the curve are....? |
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Definition
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Term
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Definition
| the amount of one good given up when producing more of another good. |
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Term
| Why is the production possibilities frontier bowed outward? |
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Definition
| because the opportunity cost of producing more of a good increases as we near maximum production of that good. |
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Term
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Definition
| a technological advance in production shifts the production possibilties frontier outward. |
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Term
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Definition
| the study of how households and firms make decisions and how they interact in specific markets. |
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Term
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Definition
| the study of economy-wide phenomena such as the federal deficit, the rate of unemployment, and policies to improve our standard of living. |
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Term
| Positive Statements are... |
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Definition
| when economists explain the world as it is. |
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Term
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Definition
| economists explain the world how it should be. |
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Term
| Economists may have different scientific judgments because..... |
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Definition
| they disagree about the validity of alternative positive theories regarding how the world works |
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Term
| Economists may have different values because..... |
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Definition
| they may have different normative views about what policy should try to accomplish. |
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Term
| Trade allows each to benefit because... |
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Definition
because trade allows for specialization. |
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Term
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Definition
| compares the quantity of inputs required to produce a good. |
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Term
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Definition
| compares opportunity costs of production for each producer. |
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Term
| The producer with the lower opportunity cost of production is said to have a.... |
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Definition
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Term
If buyers increase the quantity demanded at each price, the demand curve shifts to the.... |
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Definition
| right (increase in demand) |
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Term
If buyers decrease the quantity demanded at each price, the demand curve shifts to the.... |
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Definition
| left (decrease in demand) |
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Term
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Definition
| a good for which an increase in income leads to an increase in demand. |
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Term
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Definition
| a good for which an increase in income leads to a decrease in demand. |
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Term
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Definition
| 2 goods are used together (decrease in demand) |
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Term
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Definition
| upward sloping due to the law of supply. |
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Term
| If producers increase the quanity supplied at each price, the supply cruve shifts... |
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Definition
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Term
| If producers decrease the quantity supplied at each price, the supply curve shifts to the .... |
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Definition
| left (decrease in supply) |
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Term
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Definition
| is the price that balances the quantity demanded and the quantity supplied. |
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Term
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Definition
| when the price is above equilibrium price. (quantity supplied exceeds the quantity demanded) |
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Term
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Definition
| the total income or output in the economy. |
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Term
| Intermediate goods are... |
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Definition
| goods that are produced by one firm to be further processed by another firm. |
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Term
| Gross National Product measures... |
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Definition
| the income or production of a nation's permanent residents or "nationals" no matter where they are located. |
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Term
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Definition
| the total income of a nation's residents minus depreciation. |
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Term
Disposable personal income |
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Definition
income of households and nonincorporated businesses after they pay their obligations to the government. |
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Term
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Definition
| the spending by households on goods and services |
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Term
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Definition
| the value of foreign purchases of US domestic producton minus US domesic purchases of foreign production. |
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Term
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Definition
| is the value of output measured in the prices that existed during the year in which the output was produced. (current prices) |
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Term
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Definition
is the value of output measured in the prices that prevailed in some arbitrary base year. (constant prices) |
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Term
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Definition
| is a measure of the overall cost of the goods and services bought by a typical consumer. |
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