Term
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Definition
| the study of the way people organize themselves to sustain life and enhance its quality |
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| The Four Essential Economic Activities |
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Definition
1) resource maintenance
2)production
3)distribution
4)consumption
of goods and services. |
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Term
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Definition
| questions about how things should be |
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Term
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Definition
| questions about how things are |
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Term
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Definition
negative effects on the environment or people other than those directly involved in the activity
ex: A manufacturing firm's dumping of pollutants in a river, decreasing water quality downstream. |
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Term
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Definition
beneficial side effects, or unintended consequences, of economic activity that accrue largely to persons or entities that are not among the economic actors directly involved.
ex: A person who plants a flower garden for their own pleasures, pleases someone passing by. |
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Term
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Definition
tending to, preserving, or improving resources.
ex: Forestry projects that raise timber for future use. |
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Definition
the conversion of some of these resources into usable goods or services.
ex: someone cooking a meal |
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Term
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Definition
sharing of products and resources among people.
two forms: exchange and transfer
ex: handing over money to purchase a product (exchange)
ex: school boards distributing money to education services (transfer) |
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Term
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Definition
the process by which goods and services are finally put to final use by people.
ex: burning gasoline in a car |
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Term
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Definition
| made up of household, family, and communities |
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Term
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Definition
| governments and other local, national, and international organizations established for some public purpose beyond individual or family self-interest and not operation with the goal of making a profit |
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Term
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Definition
| firms that produce goods and services for profitable sale |
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Term
| Production Possibility Frontier (PDF) |
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Definition
| a curve showing the maximum amounts of two out-puts that society could produce from given resources, over a given period of time |
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Term
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Definition
| the value of the best alternative that is foregone when a choice is made. |
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Term
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Definition
social organizations set up to facilitate exchange
-labor markets
-financial markets
-farmer's markets |
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Term
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Definition
| an entity that is made up of individual economic actors and sub-organizations, which may have common or conflicting interests |
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Term
| Custom economic Organization |
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Definition
body of traditions, habits, and expectations about what it is proper and necessary for people to do in given circumstances.
- personal beliefs
-religion
*Pro* gives people a highly defined sense of their place in the natural and social world.
*Con* can be rigid and constraining / deny individual freedom |
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Term
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Definition
agreement among a group of people reached through discussion or negotiation
*Pro* allows for more flexibility and individual freedom that "custom"
*Con* very time consuming |
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Term
| Administrative Agency Coordination |
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Definition
a means of organizing an economic unit that gives decision-making authority to some person or agency
*Pro* make better-informed decisions than an individual would
*Con* the cost of gathering info would be too high |
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Term
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Definition
| when markets yield inefficient or inappropriate outcomes |
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Term
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Definition
| a curve indicating the quantities that buyers are ready to purchase ar various prices |
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Term
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Definition
| movement along a demand curve in response to a price change |
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Term
| Non-Price Determinants of Demand |
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Definition
1) tastes / preferences
2) income / wealth
3) expectations about future prices and incomes
4)price of related goods (complements vs. substitutes)
5)number of buyers in the market |
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Term
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Definition
| relationship between price and quantities, keep all else constant |
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Term
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Definition
| graphical / mathematical representation of the supply schedule |
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Term
| Non-Price Determinants of Supply (shifters) |
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Definition
1) price of inputs / resources
2) technology
3) expectations
4) price of related goods (goods that can be made with the same inputs)
5) number of producers in the market
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Term
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Definition
| a situation of rest, in which there are no forces that create change |
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Term
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Definition
| the quantity that buyers wish to buy at the stated price is greater than the quantity that sellers are willing to sell at that price |
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Term
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Definition
| the quantity that sellers wish to sell at stated price is greater than the quantity that buyers will buy at that price |
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Term
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Definition
| to carry information throughout the economy |
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Term
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Definition
| to determine who gets what |
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Term
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Definition
| A law or agreement that puts a lower limit on prices |
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Term
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Definition
| a law or agreement that puts a max on prices |
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Term
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Definition
| there is not enough of a good or service, provided at prices people can afford to meet minimal requirements for human well-being |
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Term
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Definition
| willing and able buyers are not able to find goods to buy at the going price |
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Term
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Definition
| what yo have given up by making a decision / the value of your next best alternative |
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