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Definition
| The social science that examines how people choose among the alternatives available to them |
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| The condition of having to choose among alternatives |
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| A good for which the choice of one alternative requires that another be given up |
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| A good for which the choice of one use does not require that another be given up. |
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| Fundamental Economic Questions |
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Definition
1)What should be produced
2)How goods and services should be produced
3)For whom should goods and services be produced |
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| The value of making the best alternative forgone in making any choice |
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| A decision to do a little more or a little less of something. |
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| The current level of an activity |
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| The branch of economics that focuses on the choices made by consumers and firms and the impacts those choices have on individual markets |
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Definition
| The branch of economics that focuses on the impact of choices on the total, or aggregate, level of economic activity |
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Term
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Definition
| A hypothesis that has not been rejected after widespread testing and that wins general acceptance |
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Definition
| A theory that has been subjected to even more testing and that has won virtually universal acceptance |
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| A set of simplifying assumptions about some aspect of the real world |
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Term
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Definition
| Latin for "all things being equal" |
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| A statement of fact or a hypothesis |
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Term
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Definition
| A statement that makes a value judgment |
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Term
| Production Possibilities Model |
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Definition
| a model that shows the goods and services that an economy is capable of producing – its opportunities – given the factors of production and the technology it has available. |
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Definition
| is the set of rules that define how an economy’s resources are to be owned and how decisions about their use are to be made. |
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Definition
| the resources available to the economy for the production of goods and services. |
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Definition
| the value, or satisfaction, that people derive from the goods and services they consume and the activities they pursue. |
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Definition
| the human effort that can be applied to the production of goods and services |
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Term
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Definition
| a factor of production that has been produced for use in the production of other goods and services. |
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Term
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Definition
| includes money and other “paper “ assets (such as stocks and bonds) that represent claims on future payments. |
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Definition
| includes tools of production such as tractors for farming, screwdrivers, hammers, roads, and bridges. |
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Definition
| are the resources of nature that can be used for the production of goods and services. |
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| are the skills a worker has as a result of education, training, or experience that can be used in production. |
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| the knowledge that can be applied to the production of goods and services. |
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Term
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Definition
| a person who, operating within the context of a market economy, assumes various risks in the hopes of earning profits by finding new ways to organize factors of production |
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Term
| production possibilities curve |
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Definition
| a graphical representation of the alternative combinations of goods and services an economy can produce. It describes opportunity costs and tradeoffs. |
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Term
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Definition
| is the situation that occurs if the opportunity cost of producing that good or service is lower for that economy than for any other. |
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Term
| law of increasing opportunity cost |
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Definition
| states that as an economy moves along its production possibilities curve in the direction of producing more of a particular good, the opportunity cost of additional units of that good will increase. |
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Term
| Market capitalist economy |
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Definition
| Economy in which resources are generally owned by private individuals who have the power to make decisions about their use. |
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Term
| Command socialist economy |
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Definition
| Economy in which government is the primary owner of capital and natural resources and has broad power to allocate the use of factors of production. |
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Term
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Definition
| Economy that combines elements of market capitalist and command socialist economic systems. |
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