Term
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Definition
| The condition that arises because wants exceed the ability of resources to satisfy them. |
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Term
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Definition
| The social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices. |
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Term
| What are the two questions of economics? |
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Definition
1) How do choices end up determining what, how, and for whom goods and services get produced?
2) When do choices made in the pursuit of self- interest also promote the social interest? |
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Term
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Definition
| The object and the actions that people value and produce to satisfy human wants. |
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Definition
| The choices that are best for the individual who makes them. |
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Definition
| The choices that are best for society as a whole |
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Definition
| A choice that uses the available resources to best achieve the objective of the person making the choice. |
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Term
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Definition
| The opportunity cost of something is the best thing you must give up to get it. |
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Term
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Definition
| A previously incurred and irreversible cost. |
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Definition
| The gain or pleasure that something brings. |
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Term
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Definition
| A choice that is made by comparing all the relevant alternatives sysmatically and incrementally. |
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Definition
| The opportunity cost that arises from a one-unit increase in an activity. What you must give up to get one additional unit of it. |
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Term
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Definition
| The benefit that arises from a one-unit increase in an activit. It is measured by what you are willing to give up to get one additional unit of it. |
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Term
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Definition
| A reward or a penalty- a "carrot" or a "stick"- that encourages or discourages an action. |
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Term
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Definition
| The study of the choices that individuals and businesses make and the way these choices interact and are influenced by governments. |
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Term
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Definition
| The study of the aggregate(or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make. |
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Term
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Definition
| Statements which are about what IS. They can be right or wrong, but it can be tested against the facts. |
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Definition
| Statements that ought to be. They cannot be tested. |
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Term
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Definition
| The cental idea that economists use to unscramble cause and effect and means "other things being equal". |
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Term
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Definition
| A tendency for the values of two variables to move together in a precitable and related way. |
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Term
| Consumption Goods and Services |
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Definition
| Goods and services that bought by individuals and used to provide personal enjoyment and contribute to a person's quality of life. |
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Term
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Definition
| Goods that are bought by businesses to increase their productive resources. |
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Term
| Government Goods and Services |
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Definition
| Goods and services that are bought by governments. |
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Term
| Export Goods and Services |
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Definition
| Goods and services that are produced in one country and sold in other countries. |
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Term
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Definition
| The productive resources that are used to produce goods and services- land, labor, capital, and entrpreneurship. |
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Definition
| The "gifts of nature" or natural resources that we use to produce goods and services. |
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Definition
| The work time and work effort that people devote to producing goods and services. |
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Term
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Definition
| The knowledge and skill that people obtain from education, on-the-job training, and work experience. |
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Term
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Definition
| Tools, instruments, machines, buildings, and other items that have been produced in the past and that businesses now use to produce goods and services. |
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Term
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Definition
| The human resource that organizes labor, land, and capital. |
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Term
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Definition
| Income paid for the use of land. |
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Definition
| Income paid for the services of labor. |
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Definition
| Income paid for the use of capital. |
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Term
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Definition
| Income earned by an entrepreneur for running a business. |
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Term
| Functional Distribution of Income |
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Definition
| The distribution of income among the factors of production. |
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Term
| Personal Distribution of Income |
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Definition
| The distribution of income among households. |
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Term
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Definition
| A model of the economy that shows the circular flow expenditures and incomes that resulr from decision maker's choices and the way those choices interact to determine what, how, and for whom goods and services are produced. |
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Term
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Definition
| Individuals or groups of people living together. |
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Term
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Definition
| The institutions that organize the production of goods and services. |
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Term
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Definition
| Any arrangement that brings buyers and sellers together and enables them to get information and do business with each other. |
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Definition
| Markets in which goods and services are bought and sold. |
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Term
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Definition
| Markets in w hich the services of factors of production ar bought and sold. |
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Term
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Definition
| The total amount that the federal government has borrowed to make expenditures that exceed tax revenure- to run a government budget deficit. |
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Term
| Production Possibilities Frontier |
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Definition
| The boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology. |
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Term
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Definition
| A situation in which we cannot produce more of one good or service without producing less of something else. |
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Term
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Definition
| An exhange- giving up one thing to get something else. |
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Term
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Definition
| The sustained expansion of production possibilities. |
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Term
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Definition
| The ability of a person to perform an activity or produce a good or service at a lower opportunity cost than anyone else. |
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Term
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Definition
| When one person is more productive than another person in several or even all activities. |
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Term
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Definition
| Other things remaining the same, if the price of a good rises, the quantity demanded of that good decreases; and if the price of a good falls, the quantity demanded of that good increases. |
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Term
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Definition
| The amount of any good, service, or resource that people are willing and able to buy during a specified period at a specified price. |
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Term
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Definition
| The relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same. |
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Term
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Definition
| A list of the quantities demanded at each different price when all the other influences on buying plans remain the same. |
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Term
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Definition
| A graph of the relationship between the quantity demanded of a good and its price which all the other influences on buying plans remain the same. |
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Term
| Change in the Quantity Demanded |
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Definition
| A change in the quantity of a good that people plan to buy that results from a change in the price of the good. |
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Term
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Definition
| A change in the quantity that people plan to buy when any influence on buying plans other than the price of the good changes. |
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Term
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Definition
| A good that can be consumed in place of another good. |
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Term
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Definition
| A good that is consumed with another good. |
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Term
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Definition
| A good for which demand increases when income increases and demand decreases when income decreases. |
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Term
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Definition
| A good for which demand decreases when income increases and demand increases when income decreases. |
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Term
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Definition
| The amount of any good, service, or resource that people are willing and able to sell during a specified period at a specified price. |
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Term
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Definition
| The relationship between the quantity supplied and the price of a good when all other influences on selling plans remain the same. |
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Term
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Definition
| A list of the quantities supplied at each different price when all the other influences on selling plans remain the same. |
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Term
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Definition
| A graph of the relationship between the quantity supplied of a good and its price when all the other influences on selling plans remain the same. |
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Term
| Change in the Quantity Supplied |
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Definition
| A change in the quantity of a good that suppliers plan to sell that results from a change in the price of the good. |
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Term
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Definition
| A change in the quantity that suppliers plan to sell when any influence on selling plans, other than the price of the good, changes. |
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Term
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Definition
| A good that can be produced in place of another. |
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Term
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Definition
| A good that is produced along with another good. |
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Term
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Definition
| When the quantity demanded equals the quantity supplied-when buyers' and serllers' plans are in balance. |
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Term
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Definition
| The price at which the quantity demanded equals the quantity supplied. |
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Term
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Definition
| The quantity that is bought and sold at the equilibrium price. |
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Term
| Shortage or Excess Demand |
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Definition
| A situation in which the quantity demanded exceeds the quantity supplied. |
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Term
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Definition
| A situation in which the quantity supplied exceeds the quantity demanded. |
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Term
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Definition
| The lowest price at which it is legal to trade a particular good, service, or factor of production. |
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Term
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Definition
| A government regulation that makes hiring labor for less than a specified wage illegal. |
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Term
| Price Ceiling or Price Cap |
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Definition
| The highest price at which it is legal to trade a particular good, service, or factor of production. |
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