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Definition
| the limited nature of society's resources. |
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| the study of how society manages its scarce resources. |
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| the property of society getting the most it can from its scarce resources. |
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Definition
| the property of distributing economic prosperity uniformly among the members of society. |
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| people who systematically and purposely do the best they can to achieve their objectives. |
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| small incremental adjustments to a plan of action. |
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Term
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| something that induces a person to act. |
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Definition
| an economy that allocates resources through the decentralized decisions of many firms and household as they interact in markets for goods and services. |
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Definition
| the ability of an individual to own and exercise control over scarce resources. |
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Term
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Definition
| a situation in which a market left on its own fails to allocate resources efficiently. |
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Definition
| the impact of one person's actions on the wellbeing of a bystander. |
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Definition
| the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices. |
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Definition
| the quantity of goods and services produced from each unit of labor input. |
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Term
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Definition
| fluctuations in economic activity, such as employment and production. |
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Term
| PRODUCTION POSSIBILITIES FRONTIER |
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Definition
| a graph that shows the combinations of output that the economy can possibly produce given the available production technology. |
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Term
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Definition
| a visual model of the economy that shows how dollars flow through markets among households and firms. |
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Term
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Definition
| the study of how households and firms make decisions and how they interact in markets. |
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Term
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Definition
| the study of economy-wide phenomena, including inflation, unemployment, and economic growth. |
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Term
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Definition
| claims that attempt to describe the world as it is. |
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Term
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Definition
| claims that attempt to describe the world as it is. |
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Term
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Definition
| claims that attempt to prescribe how the world should be. |
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Term
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Definition
| the ability to produce a good using fewer inputs than another producer. |
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Term
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Definition
| whatever must be given up to obtain some item. |
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Term
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Definition
| the ability to produce a good at a lower opportunity cost than another producer. |
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Term
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Definition
| goods produced abroad and sold domestically. |
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Term
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Definition
| goods produced domestically and sold abroad. |
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Term
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Definition
| a group of buyers and sellers of particular good or service. |
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Term
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Definition
| a market in which there are many buyers and many sellers so that each has a negligible impact on the market price. |
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Term
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Definition
| the amount of good that buyers are willing and able to purchase. |
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Term
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Definition
| the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises. |
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Term
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Definition
| a table that shows the relationship between the price of a good and the quantity demanded. |
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Term
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Definition
| a graph of the relationship between the price of a good and the quantity demanded. |
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Term
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Definition
| a good for which, other things equal, an increase in income leads to an increase in demand. |
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Term
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Definition
| a good for which, other things equal, and increase in income leads to a decrease in demand. |
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Term
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Definition
| two goods for which an increase in the price of one leads to an increase in the demand for the other. |
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Term
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Definition
| two goods for which an increase in the price of one leads to a decrease in the demand for the other. |
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Term
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Definition
| the amount of a good that sellers are willing and able to sell. |
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Term
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Definition
| the claim that, other things equal, the quantity suppled of a good rises when the price of the good rises. |
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Term
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Definition
| a table that shows the relationship between the price of a good and the quantity supplied. |
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Term
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Definition
| a graph of the relationship between the price of a good and the quantity supplied. |
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Term
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Definition
| a situation in which the market price has reached the level at which quantity suppled equals quantity demanded. |
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Term
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Definition
| the quantity suppled and the quantity demanded at the equilibrium price. |
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Term
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Definition
| a situation in which quantity supplied is greater than quantity demanded. |
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Term
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Definition
| a situation in which quantity demanded is greater than quantity supplied. |
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Term
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Definition
| the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance. |
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Term
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Definition
| a measure of the responsiveness of quantity supplied to one of its determinants. |
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Term
| PRICE ELASTICITY OF DEMAND |
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Definition
| a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price. |
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Term
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Definition
| the amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold. |
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Term
| INCOME ELASTICITY OF DEMAND |
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Definition
| a measure of how much the quantity demanded of a good responds to a change in consumers' income, computed as the percentage change in quantity demanded divided by the percentage change in income. |
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Term
| CROSS-PRICE ELASTICITY OF DEMAND |
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Definition
| a measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in the price of the second good. |
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Term
| PRICE ELASTICITY OF SUPPLY |
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Definition
| a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price. |
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Term
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Definition
| a legal maximum on the price at which a good can be sold. |
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Term
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Definition
| a legal minimum on the price at which a good can be sold. |
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Term
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Definition
| the manner in which the burden of a tax is shared among participants in a market. |
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Term
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Definition
| the study of how the allocation of resources affects economic well-being. |
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Term
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Definition
| the maximum amount that a buyer will pay for a good. |
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Term
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Definition
| the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. |
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Term
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Definition
| the value of everything a seller must give up to produce a good. |
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Term
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Definition
| the amount a seller is paid for a good minus the seller's cost of providing it. |
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Term
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Definition
| the property of a resource allocation of maximizing the total surplus received by all members of society. |
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Term
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Definition
| the property of distributing economic prosperity uniformly among the members of society. |
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