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| the study of how society manages its scarce resources |
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| land, labor, and capitalism;factors that people use to create the things they want |
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| Products that are purchased for consumption by the average consumer; final goods |
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| Any tangible assets that an organization uses to produce goods or services such as office buildings, equipment and machinery |
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| The relationship between an economy's unemployment rate and its gross national product (GNP); which states that when unemployment falls by 1%, GNP rises by 3% |
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| the property of society getting the most it can from its scarce resources |
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| the study of how households and firms make decisions and how they interact in markets |
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| the study of economy-wide phenomenona, including inflation, unemployment, and economic growth |
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| claims that attempt to describe the world as it is |
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| claims that attempt how the world should be |
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| a Latin , translated as "other things being equal"; used as a reminder that all variables other than the ones being studied are assumed to be constant |
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| The false assumption that something which is true for one segment of the economy is true for the economy as a whole |
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| the limited nature of society's resources |
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| whatever must be given up to obtain some item |
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| When economists make a number of simplified assumptions about how the economy, or some part of it, behaves, and then see what this implies in various different scenarios |
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| production possibilities frontier |
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Definition
| a graph that shows the combonations of output that the economy can possibly produce given the available factors of production and the available production technology |
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Definition
| the ratio comparing units produced to production cost per unit remains the same regardless of industry volume or demand growth; This supply-curve equilibrium occurs when input costs do not increase in response to increased demand |
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| law of increasing opportunity cost |
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Definition
| The proposition that opportunity cost, the value of foregone production, increases as the quantity of a good produced increases |
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| the amount of a good or service that people are both willing and able to buy |
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| the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises |
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| the amount of a good that buyers are willing and able to purchase |
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| The collective sum of the demands of all potential customers (market participants) for a specific product over a specific period in a specific market |
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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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| two goods for which an increase in the price of one leads to a decreases in the demand for the other |
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| a good for which, other things equal, an increase in income leads to an increase in demand |
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| a good for which, other things equal, an increase in income leads to a decrease in demand |
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| the amount of a good or service available at any particular price |
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| the claim that, other things equal, the quantity supplied of a good rises when the price of the good rises |
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| the amount of a good that sellers are willing and able to sell |
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| a market in which supply and demand have been brought into balance |
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Definition
| the price that balances supply and demand |
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Definition
| the quantity supplied and the quantity demanded when the price has adjusted to balance supply and demand |
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| The long-run pattern of economic growth and recession |
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| a period of declining real incomes and rising unemployment |
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| The transition point between economic recession and recovery |
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| A period of increasing business activity signaling the end of a recession |
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| The number of people of working age without a job |
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Definition
| an increase in the overall level of prices in the economy |
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Definition
| An increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms, which include inflation, or in real terms |
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| the situation where an economy is operating at below its full-employment equilibrium; the level of real gross domestic product (GDP) is currently lower then it is at full-employment, which puts downward pressure on prices in the long run |
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| the distance between the current level of real gross domestic product (GDP) and full employment (long run equilibrium) real GDP |
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| a measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants |
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Term
| inelastic and elastic goods |
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Definition
I:the supply and demand for a good are unaffected when the price of that good or service changes
E:the supply and demand for a good or service can vary significantly due to the price |
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Term
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Definition
| Consumers want more of a certain good than the economy can supply or an economy has too much of one good that consumers are not buying |
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Term
| changes in quantity supplied/demanded |
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Definition
| The quantity supplied goods' market price may go up or down; a certain good may be higher in demand or lower |
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