Term
|
Definition
| that although our wants are unlimited, the resources available to fulfill thos wants are limited. |
|
|
Term
|
Definition
| is the study of the chices consumer, business manager, and government official make to attain their goals, given their scarce resources |
|
|
Term
| Three important economic ideas |
|
Definition
1) People are rational,
2) People respond to incentived
3) optimal decisions are made at the margin |
|
|
Term
| Three Fundimental Questions |
|
Definition
1)What goods and services will be produced?
2) How will the goods and services be produced?
3)Who will recieive the goods and services produced? |
|
|
Term
|
Definition
| are simplified version of reality used to analyze real-world economic situations |
|
|
Term
|
Definition
| is a group of buyers and sellers of a good or service and the instituion or arrangement by which thery come together to trade |
|
|
Term
|
Definition
| Economists generally assume that people are rational. |
|
|
Term
|
Definition
| Economists emphasize that consumers and firms consistently respond to economic incentives |
|
|
Term
|
Definition
|
|
Term
| When is it the optimal dcision to continue any activity. |
|
Definition
| Up to the point where Marginal Benefit = Marginal Cost |
|
|
Term
|
Definition
| comparing marginal benefits and marginal costs |
|
|
Term
|
Definition
| Producing more of one good or service means producing less of another good or service |
|
|
Term
|
Definition
| is the highes-valued alternative that must be given up to engage in that activity. |
|
|
Term
| Centrally Planned Economy |
|
Definition
| the government decides how economic resources will be allocated |
|
|
Term
|
Definition
| decisions of households and firms interacting in markets allocate economic resources |
|
|
Term
|
Definition
| still primaily a market economy because most economic decisions result from interaction of buyers and sellers in markets, howerver, the government plays a significant role in the allocation of resources |
|
|
Term
|
Definition
|
|
Term
|
Definition
| concerned with what ought to be |
|
|
Term
| Production Possibilities Frontier (PPF) |
|
Definition
| is a curve showing the maximum attainable combinations of two products that may be produced witha vailable resources and current technology. |
|
|
Term
| [image]What are Points A,B,and C referred to as? |
|
Definition
A- is attainable, but not efficient
B- is attainable and efficient
C- is unattainable |
|
|
Term
| How is Economic Growth shown? |
|
Definition
| Shifts in the Production possibiliites frontier (outwards) |
|
|
Term
|
Definition
| ability of and individual, afirm, or a country to produce more of a good or service than competitors |
|
|
Term
|
Definition
| the ability of and individual, a firm, or a country to produce a good or service at a loer opportunity cost than competitors |
|
|
Term
|
Definition
| is a group of buyers and sellers of a good or service and thye institution or arrangement by which they come together to trade |
|
|
Term
|
Definition
| are markets for goods-such as computers-and services-such as medical treatment |
|
|
Term
|
Definition
| are the inputs used to make goods and services. |
|
|
Term
| What are the four broad categories of the factors of production |
|
Definition
1) Labor
2) Capital
3) Natural resources
4) An Entrepeneur |
|
|
Term
|
Definition
| [image]simple economic model to see how participants in markets are linked |
|
|
Term
| What are the two key groups in a market structure? |
|
Definition
|
|
Term
|
Definition
| when athe government places few restrictions on how a goodor a service can be produced or sold or on how a factor of production can be employed. |
|
|
Term
|
Definition
| is a someone who operates a business. |
|
|
Term
| Perfecly Competitive Market |
|
Definition
| many buyers and sellers, all the products sold are identical, and there are no barriers to new firms entering the market |
|
|
Term
|
Definition
| shows the relationship between the price of a product and the quantity of the product demanded at that price |
|
|
Term
|
Definition
| amount of a good or a service that a consumer is willing and able topurchase at a given price |
|
|
Term
|
Definition
| curve that shows the relationship between the price of a product and the uantiy of the product demanded. |
|
|
Term
|
Definition
| demand by all the consumers of a given good or service |
|
|
Term
|
Definition
| Holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the prce of a product rises, the uantity demanded of the product will decrease |
|
|
Term
|
Definition
| refer to the change in the quantity demanded of agood that results from a change in price, making the good more or less expensive relative to other goods that are substitutes |
|
|
Term
|
Definition
| price change refers to the change in the quantty demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power |
|
|
Term
| certeris paribus condition |
|
Definition
| Latin for "all else equal" |
|
|
Term
| Variable that shift the demand curve |
|
Definition
-Income
-Prices of related goods
-Tastes
-Population and demographics
-Expected future prices |
|
|
Term
| Normal Goods vs Inferior Goods |
|
Definition
| Normal goods will show an increase in demand as income increase and a decrease in demand as income decreases. And inferrior good as hand inverse relation to the relation of income. An inferior good will be purchased in substitute for a normal good when the income in decreased and vise versa. |
|
|
Term
| Substitutes vs Complements |
|
Definition
| If two goods are substitutes then the change in demand of one will cause a shift in the demand curve of the other in a way that is opposite of the the change. If two goods are complements then the change in demand of one will cause a shift in another in a way that is the same as the change of the original good. |
|
|
Term
|
Definition
| occurs when there is an optimal distribution of goods and services |
|
|
Term
|
Definition
| the amount of a good or service that a firm is willing and able to supply at a given price |
|
|
Term
|
Definition
| is a table that shows the relationship between theprice of a product and the quantity of the product supplied |
|
|
Term
|
Definition
| shows the relationship between the price of a production and the quantity of the product supplied. |
|
|
Term
|
Definition
| which states that, holding everything else constant, increases in price caus increases in the quantity supplied, and decreases in pice cause decreades in the quantity supplied |
|
|
Term
| Variables that shift the market supply |
|
Definition
- Prices of inputs
- Technological change
- Prices of substitutes in production
- Number of firms in the market
- Expected future prices |
|
|
Term
|
Definition
At market equilibruimwillthe quantitydemanded equal the quantity supplied
[image] |
|
|
Term
| Competitve Market Equilibrium |
|
Definition
| Markets that have many buyers and many sellers are competitive markets, and equilibruim in thers markets. |
|
|
Term
|
Definition
| occurs when the economy is operating at its production possibility frontier (PPF). |
|
|
Term
|
Definition
| measures the costs and benefits of different courses of action |
|
|
Term
| One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoiidable fact comes from a reality an economist calls.... |
|
Definition
|
|
Term
|
Definition
| occurs when a good or service is produced at the lowest possible cost |
|
|
Term
|
Definition
| occurs when production is in accordance with consumer preferences |
|
|
Term
|
Definition
| the fair distribution of economic benfits |
|
|
Term
|
Definition
| market in which buying and selling take place at prices that violate government price regulations |
|
|
Term
|
Definition
| the actual division of the burden of tax between buyers and sellers in a market |
|
|
Term
Which Areas Represtent Consumer and Producer Surplus
[image] |
|
Definition
Area A is the Consumer Surplus
Area B is the Producer Surplus |
|
|
Term
Which Areas Represtent Consumer and Producer Surplus and Dead Weight Loss
[image] |
|
Definition
A is the Consumer Surplus
B+C+D is the Producer Surplus
E+F is the Dead Weight Loss |
|
|
