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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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| A viewpoing that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions |
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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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| 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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| The comparison of marginal (additional) benefits and marginal costs, usually for decision making |
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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 widely accepted generalization about the economic behavior of individuals or institutions |
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| Other-Things-Equal Assumption |
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| The assumption that factros other than those being considered are held constant; ceteris paribus assumption |
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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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| A collection of specific economic units treated as if they were one. For example, 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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| The part of economics concerned with decision making by individual units susch as a household, a firm, or an industry and with individual markets, specific goods and services, and product and resource prices |
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| The analysis of facts or data to establish scientific generalizations about economic behavior |
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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 imple3mented; policy economics |
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| The choices necessitated because society's economic wants for goods and services are unlimited but the resources are available to satisfy these wants are limited. |
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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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| 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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| Natural resources used to produce goods and services |
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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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| Human-made resources used to produce goods and services; goods that do not directly satisfy human wants; also called capital goods |
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| Spending for the production and accumulation of capital and additions to inventories |
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| The human resource that combines the other resources to produce a product, makes nonroutine decisions, innovates, and bears risks |
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| Economic resources: land, capital, labor, and entrepreneurial ability |
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| Products and services that satisfy human wants directly |
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| Human-made resources used to pruduce goods and services; goods that do not directly satisfy human wants; also called capital |
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| Production 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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| Law of Increasing Opportunity Costs |
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| The principle that as the production of a good increases, the opportunity cost of producing an additional unit rises |
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| (1) An outward shift in the production possibilities curve that results from an increase in resources supplies or quality or an improvement in technology; (2) an increse of real output or real output per capita |
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