Term
|
Definition
| inputs or factors of production, used to produce goods and services that people want; consist of labor, capital, natural resources and entrepreneurial ability |
|
|
Term
|
Definition
| the physical and mental effort used to poduce goods and services |
|
|
Term
|
Definition
| buildings, equipment and human skills used to produce goods and services |
|
|
Term
|
Definition
| all gist of nature used to produce goods and services; includes renewable and exhaustible resources |
|
|
Term
|
Definition
| trees, solar energy, plastics |
|
|
Term
|
Definition
| oil, fossil fuels, elctricity |
|
|
Term
|
Definition
| profit seeking decision maker who starts with an idea, organizes an enterprise to bring that idea to life, and assumes the risk of that operation |
|
|
Term
|
Definition
| the imagination required to develop a new product or process, the skill needed to organize production, and the willingness to take the risk of the profit or loss |
|
|
Term
|
Definition
| payment to resource owners for their labor |
|
|
Term
|
Definition
| payment to resource owners for the use of capital |
|
|
Term
|
Definition
| payment to resource owners for the use of capital |
|
|
Term
|
Definition
| payment to resource owners for the use of their natural resources |
|
|
Term
|
Definition
reward for entrepreneurial ability
(sales - resource cost) |
|
|
Term
|
Definition
| a tangible product used to satisfy human want |
|
|
Term
|
Definition
an activity, or intangible product, used to satisfy human wants
Ex: dental, education, concerts |
|
|
Term
|
Definition
| when the amount people desire exceed the amount available at a zero price |
|
|
Term
|
Definition
| a set of arrangements by which buyers and sellers carry out exchange at mutually agreeable terms: financial, stock, housing, tech, automobile |
|
|
Term
|
Definition
| market in which goods and services are bought and sold; the consumer operates |
|
|
Term
|
Definition
| market in which a resource is bought and sold; business operates |
|
|
Term
|
Definition
| a diagram that traces the flow if resources products, income and revenue among economic decision makers |
|
|
Term
|
Definition
| each individual tries to maximize the expected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit |
|
|
Term
|
Definition
| incremental, additional, or extra; used to describe a change in an economic variable |
|
|
Term
|
Definition
the rise and all f economic activity relative to the long term growth trend of the economy
business cycles |
|
|
Term
|
Definition
| a simplification of reality used to make predictions about cause and effect in the real world |
|
|
Term
|
Definition
| a simplification of reality used to make predictions about cause and effect in the real world |
|
|
Term
|
Definition
|
|
Term
|
Definition
| a measure, such as price or quantity that can take on different values at different times |
|
|
Term
| Other Things Constant Assumption |
|
Definition
the assumption when focusing on the relation among key economic variables, that other variables remains unchanged
Certeris Paribus |
|
|
Term
|
Definition
| describes the expected behavior of economic decision makers; what motivates them |
|
|
Term
|
Definition
| a theory about how key variables relate to each other |
|
|
Term
| Positive Economic Statment |
|
Definition
| a statement that can be proved or disproved by reference to facts |
|
|
Term
| Normative Economic Statement |
|
Definition
| statements that reflects on opinion which cannot be proved or disproved by reference to facts |
|
|
Term
| Association is Causation Fallacy |
|
Definition
| the incorrect idea that if 2 variables are associated in time, one must necessarily cause the other |
|
|
Term
|
Definition
| the incorrect belief that what is true for the individual, or part, must necessarily be true for the whole group, or the whole |
|
|
Term
|
Definition
| unintended consequences of economic actions that may develop slowly over time as people react to events |
|
|
Term
|
Definition
|
|
Term
|
Definition
| exact cost, real number, dollar amounts |
|
|
Term
|
Definition
| implied cost, unknown costs |
|
|
Term
|
Definition
| what is lost when a decision is made |
|
|
Term
| Law of Comparative Advantage |
|
Definition
| the individual, firm, region or country with the lower opportunity cost of producing a particular good should specialize in that good |
|
|
Term
|
Definition
| the ability to make something using fewer resources than other producers were |
|
|
Term
|
Definition
| the ability to make something at a lower opportunity cost than other producers face |
|
|
Term
|
Definition
the direct exchange of one good for another without using money
Ex: Russia (oil) and Brazil (wheat) |
|
|
Term
|
Definition
| breaking down the production of a good into separate tasks; increases productivity |
|
|
Term
|
Definition
| workers specialize at a task in the production process at which they are most efficient |
|
|
Term
| The Production Possibilities Frontier (PPF) |
|
Definition
| a curve showing alternative combinations of goods that can be produced when available resources are used efficiently; boundary between inefficient and unattainable combinations |
|
|
Term
|
Definition
| the conditions that exist when there is no way resources can be reallocated to increase the production of one good without decreasing the productions of another good; all resources are employed efficiently |
|
|
Term
|
Definition
| when resources are not eeployed efficiently; any point inside the PPF |
|
|
Term
|
Definition
cannot be achieved with the existing resources, technology, human capital, and/or rule of the game
any point outside the PPF
Ex: Soviet Union, Asia, North Korea |
|
|
Term
|
Definition
| increase in the economy's ability to produce goods and services; outward/upward shifts f the ecomony's PPF |
|
|
Term
| Law of Increasing Opportunity |
|
Definition
| to produce each additional increment of a good, a successively larger increment of an alternative good must be sacrificed if the economy's resources aw already being used efficiently |
|
|
Term
|
Definition
| a set of mechanisms and institutions that resolve the what, how and for whom questions |
|
|
Term
|
Definition
| an economic system characterized by the private ownership of resources and the use of prices to coordinated economic activity in unregulated markets |
|
|
Term
|
Definition
| an economic system characterized by the private ownership of resources and the use of prices to coordinated economic activity in unregulated markets |
|
|
Term
|
Definition
father if micro
laissez faire
supply and demand
divison of labor
invisible hand |
|
|
Term
|
Definition
|
|
Term
|
Definition
| market/economy will fix itself |
|
|
Term
|
Definition
economic system characterized by the private ownership of some resources and the public ownership of other resources
regulated and unregulated
Ex: Great Britian |
|
|
Term
|
Definition
| economic system characterized by the public ownership of resources and centralized planning |
|
|
Term
|
Definition
smaller the economies will grow faster than richer economies
as a result, all economonies should eventually converge in terms of per capita income
this happens because big economies help out, causing upward shifts and growth/advancement |
|
|
Term
|
Definition
| the satisfaction or sense of well being received from consumption |
|
|
Term
|
Definition
utilitarianism
if it serves a purpose, keep it; if not get rid of it |
|
|
Term
|
Definition
"On the Principles of Political Economy and Taxation"
England(cloth) & Portugal(wine)-the 2 trade and costs go down
father of modern international trade |
|
|
Term
|
Definition
|
|
Term
|
Definition
cash or in kind benefits given to individuals as outright grants from the government
food stamps & social security
potential negative effects- dependency |
|
|
Term
|
Definition
developments of large scale factory production
1750- Great Britain |
|
|
Term
|
Definition
| economic units formed by profit seeking entrepreneurs who use resources to produce goods and services for sale |
|
|
Term
|
Definition
a firm with a single owner who has the right to all profits
has unlimited liability for the firms debts
most common type of business |
|
|
Term
|
Definition
a firm with multiple owners who share the firms profits
all bear unlimited liability for the firms debts
only 8% of businesses
problems: money issues-embellishment
different/ conflicting visions |
|
|
Term
|
Definition
a legal entity by stockholders
liability is limited to the value of their stock
realized capital gain- an increase in the market value of a share that occurs between the time that the share is purchased and the time it is sold
most important in terms of total |
|
|
Term
|
Definition
| an organization of people who pull their resources to by and sell more efficiently then they could individually |
|
|
Term
|
Definition
groups that do not pursue profit as a goal
engage in charitable, educational, humanitarian, cultural, professional or other activities with a special purpose
Ex: United Way, St. Jude, Matthew 25 |
|
|
Term
|
Definition
technological change spawned by the invention of the microchip and the Internet that enhanced the acquistion, analysis and transmission of information
Ex: banking- virtual wallets |
|
|
Term
|
Definition
a condition that arises when the unregulated operations of market yields socially undesirable results
Ex: K-Mart- sues Walmart, loses products |
|
|
Term
|
Definition
| prohibitions against price fixing and other anti-competitive practices |
|
|
Term
|
Definition
a sole producer of a product for which there are no close substitutes
illegal |
|
|
Term
|
Definition
one firm that can sense the entire market at a lower per-unit cost than can 2 or more firms
Ex:cable- one group maintains infrastructure |
|
|
Term
|
Definition
both rival in consumption and exclusive
Ex: pizza |
|
|
Term
|
Definition
once produced, is available for all to consume, regardless of who pays for it and who doesn't
non-rival and nonexclusive
Ex: National defense |
|
|
Term
|
Definition
a cost of benefit that falls on a 3rd party and is therefore ignored by the 2 parties to the market
positive & negative |
|
|
Term
|
Definition
|
|
Term
|
Definition
use of government purchases, transfer payments, taxes, and borrowing to influence economy-wide activity such as inflation, employment and economic growth
THE GOVERNMENT |
|
|
Term
|
Definition
regulation if the money supply to influence economy-wide activity such as inflation, employment and economic growth
THE FED |
|
|
Term
| Ability-to-Pay Tax Principle |
|
Definition
those with a greater ability to pay should pay more taxes
higher income, those who own more property |
|
|
Term
| Benefits-Received Tax Principle |
|
Definition
| those who receive more benefits from the government program funded by a tax should pay more taxes |
|
|
Term
|
Definition
the distribution of tax burden among taxpayers- who ultimately pays the tax
expression |
|
|
Term
|
Definition
flat tax
the tax as a percentage of income remains consistent as income increases |
|
|
Term
|
Definition
tax as a percentage of income oncreases as income increases
United States |
|
|
Term
|
Definition
| the percentage of each additional dollar of income that goes to the tax |
|
|
Term
|
Definition
| the ax as a percentage of income decreases as income increases |
|
|
Term
| Merchandise Trade Balance |
|
Definition
| the value of a country's exported goods minus the value of is imported goods during a given period |
|
|
Term
|
Definition
| record of all economic transactions between residents of one country and residents of the rest of the world during a given period |
|
|
Term
|
Definition
freign money needed to carry out international transactions
Ex: Greece, Venezuela |
|
|
Term
|
Definition
| a tax on imports; consumer pays |
|
|
Term
|
Definition
| a legal limit on the quantity of a particular product that can be imported or exported; consumer pays |
|
|
Term
|
Definition
| a relationship between the price of good and the quantity that consumers are willing and able to buy during a given period |
|
|
Term
|
Definition
| the quantity of a good demanded during a given period relates reversely to a price |
|
|
Term
| Substitute Effect on a Price |
|
Definition
when the price of a good falls, consumers substitute that good fr other goods, which become relatively more expensive
falls=rises |
|
|
Term
|
Definition
the number if dollars a person receives per good
Ex: $400/week |
|
|
Term
|
Definition
| income measured in terms f the good and services it can buy |
|
|
Term
| Income Effect of a Price Change |
|
Definition
a fall in price of a good increases consumers' real income making consumer more able to purchase goods
normal goods- the quantity demanded increases |
|
|
Term
|
Definition
| a curve showing the relation between the price if a good and the quantity demanded during a given period |
|
|
Term
|
Definition
| the amount demanded at a particular price, as reflected by a point on a given demand cure |
|
|
Term
|
Definition
| sum of the individual demands of all consumers in the market |
|
|
Term
|
Definition
a good for which demand increases, or shifts rightward, as consume income rises
Ex: new clothes, name brand products, food, new car |
|
|
Term
|
Definition
a good which demand decreases, shifts leftward, as consumer incomes rises
Ex: used clothes, used cars |
|
|
Term
|
Definition
| related in a way that an increase in the price of one shifts the demand for the other rightward |
|
|
Term
|
Definition
related in a way that an increase in the price of one shifts the demand for the other leftward
Ex: milk and cookies |
|
|
Term
|
Definition
consumer preferences
likes and dislikes in consumption
assumed to be constant along a given demand curve |
|
|
Term
| Movement Along a Demand Curve |
|
Definition
change in quantity demanded resuting from a change in the price of the good
static- "D" |
|
|
Term
|
Definition
movement of a demand curve right or let resulting from a change in one of the determinants of demand other than the price of the good
adds a new curve (line) to the graph- D' |
|
|
Term
|
Definition
| relationship between the price of a good and the quantity that producers are willing and able to sell during a given period |
|
|
Term
|
Definition
| quantity of a good supplied during a given period is usually directly to its price |
|
|
Term
|
Definition
| a curve showing the relation between the price of a good and the quantity supplied during a given period |
|
|
Term
|
Definition
| amount offered for a sale at a particular price, as reflected by a point on a given supply curve |
|
|
Term
|
Definition
| the supply of an individual producer |
|
|
Term
|
Definition
| the sum of individual supplies of all producers in the market |
|
|
Term
|
Definition
| resources used to produce the good in questions |
|
|
Term
|
Definition
| other goods that use some or all of the same resources as the good in question |
|
|
Term
| Movement Along a Supply Curve |
|
Definition
| change in quantity supplied resulting from a change in the price of the good- static |
|
|
Term
|
Definition
| movement along a supply curve, left or right resulting from a change in one of the determinants of supply other than the price of the good |
|
|
Term
|
Definition
costs of time and information required to carry out market exchange
Ex: Chicago World Trade, Agriculture |
|
|
Term
|
Definition
at a given price, the amount by which quantity supplied exceeds quantity demanded
usually forces the price down |
|
|
Term
|
Definition
forces prices upward
at a given price, the amount by which quantity demanded exceeds quantity demaded |
|
|
Term
|
Definition
condition that exists in a market when the plans of buyers match those of sellers
quantity demanded=quantity supplied=market clears |
|
|
Term
|
Definition
condition that exists in a market when the plans of buyers do not match those of sellers
temporary mismatch between quantity supplied and quantity demanded as the market seeks equilibrium |
|
|
