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Definition
| the Study of how people use their scarce resources to satisfy their unlimited wants. |
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| the inputs, or factors of production used to produce the goods and services that people want; resources consist of labor, capital, natural resources, and entrepreneurial ability. |
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| the physical and mental effort used to produce goods and services. |
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| the buildings, equipment, and human skills used to produce goods and services. |
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| so-called "gifts of nature" used to produces goods and services; includes renewable and exhaustible resources. |
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| managerial and organizational skills needed to start a firm combined with the willingness to take the risk of profit or loss. |
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| a profit-seeking decision maker who starts with an ideal, organizes an enterprise to bring that idea to life, and assumes the rist of the operation. |
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| payment to resources owners for their labor. |
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| payment to resources owners for the use of their capital. |
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| payment to resource owners for the use of their natural resources. |
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| the reward for entrepreneurial ability; sales revenue minus resources cost. |
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| a tangible produce used to satisfy human wants. |
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| an activity, or intangible product, used to satisfy human wants. |
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| occurs when the amount people desire exceeds the amount available at a zero price. |
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| a set of arrangements by which buyers and sellers carry our exchange at mutually agreeable terms. |
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| a market in which a good or service is bought and sold. |
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Definition
| a market in which a resources is bought or sold. |
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Definition
| a diagram that traces the flow of resources, products, income, and revenue among economic decision makers. |
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Definition
| indiviuals try to maximize the epected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit. |
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Definition
| incremental, additional, or extra; used to describe a change in an economic variable. |
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| the study of the economic behavior in particular markets, such as that for computers or unskilled labor. |
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| the study of economic behavior of entire economies. |
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Definition
| a measure, such as price or quantity, that can take on different values at different times. |
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Term
| Other-Things-Constant Assumption |
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Definition
| the assumption, when focusing on the relation among key economic variables, that other variables remain unchanged in Latin, ceteris paribus. |
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Definition
| an assumption that describes the expected behavior of economic decision makes, what motivates them. |
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Definition
| a theory about how key variables relate. |
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| Positive Economic Statement |
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Definition
| a statement that can be proved or disapproved by reference to facts. |
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| Normative Economic Statement |
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Definition
| a statement that reflects an opinion, which cannot be proved or disproved by reference to the facts. |
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Term
| Association-is-Causation Fallacy |
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Definition
| the incorrect idea that if two variables are association in time. one must necessarily cause the other. |
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Term
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Definition
| the incorrect belief that what is true for the individual, or part, must necessarily be true for the group, or the whole. |
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| Unintended consequences of economic actions that may develop slowly over time as people react to events. |
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Term
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Definition
| on a graph depiction two-dimensional space, the zero point. |
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Definition
| line on a graph that begins at the origin and goes to the right and left; sometimes called the x axis. |
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Definition
| line on a graph that begins at the origin and goes up and down; sometimes called the y axis. |
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Definition
| a picture showing how variables relate in two-dimensional space; one variable is measured along the horizontal axis and the other along the vertical axis. |
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Definition
| a variable who value depends on the that of the independent variable. |
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Definition
| a variable who value determines that of the dependent variable. |
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Term
| Positive, or Direct, Relation |
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Definition
| occurs when two variable increase or decrease together; the two variables move in the same direction. |
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Term
| Negative, or Inverse, Relation |
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Definition
| occurs when two variables move in opposite directions; when one increases, the other decreases. |
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Term
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Definition
| a measure of how much the vertical variable changes for a give increase in the horizontal variable; the vertical change between two points divided by the horizontal increase. |
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