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The social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity. |
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| The part of economics concerned with the economy as a whole; with such major aggregates as the household, business, and government sectors; and with measures of the total economy. |
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The part of economics concerned with decision making by individual units such as a household, a firm, or an industry and with individual markets, specific goods and services, and profit and resource prices. |
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The amount of other products that must be forgone or sacrificed to produce a unit of a product. |
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| Other-things-equal assumption |
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The assumption that factors other than those being considered are held constant; ceteris paribus assumption. |
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| The analysis of facts or data to establish scientific generalizations about economic behavior. |
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| Productions possibilities curve |
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A curve showing the different combinations of two goods or services that can be produced in a full employment, full production economy where the available supplies of resources and technology are fixed. |
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| The procedure for the systematic pursuit of knowledge involving the observation of facts and the formulation and testing of hypotheses to obtain theories, principles, and laws. |
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| A collection of specific economic units treated as if hey were one. [Ex: all prices of individual goods and services are combined into a price level, or all units of output are aggregated into gross domestic product. |
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| A line that shows the different combinations of two products a consumer can purchase with a specific money income, given the products' prices. |
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| Human-made resource (buildings, machinery, and equipment) used to produce goods and services goods that do not directly satisfy human wants; also called capital goods. |
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| Products and services that satisfy human wants directly. |
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(1) An outward shift in the production possibilities curve that results from an increase in resource supplies or quality or an improvement in technology; (2) an increase of real growth output (gross domestic product) or real output per capita. |
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| A viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions. |
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| A widely-accepted generalization about the economic behavior of individuals or institutions. |
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| The land, labor, capital, and entrepreneurial ability that are used in the production of goods and services; productive agents; factors of production. |
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| The choices necessitated because society's economic wants for goods and services are unlimited but the resources available to satisfy these wants are limited (scarce). |
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| The human resource that combines the other resources to produce a product, makes nonroutine decisions, innovates, and bears risk. |
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| Economic resources: land, labor, capital, & entrepreneurial ability. |
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| Spending for the production and accumulation of capital and additions to inventories. |
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| People's physical and mental talents and efforts that are used to help produce goods and services. |
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| Natural resources used to produce goods and services. |
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| law of increasing opportunity costs |
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| The principle that as the production of a good increases, the opportunity cost of production an additional unit rises. |
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| Comparisons of marginal benefits and marginal costs for decision making. |
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| The part of economics involving value judgements about what the economy should be like; focused on which economic goals and policies should be implemented; policy economics. |
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| The want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service. |
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