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AP Macro Unit 1 Flashcards

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4846225012scarcitythe basic economic problem; it is a lack of needed or wanted resources relative to the demand for the resources.0
4846225013TINSTAAFLacronym for THERE IS NO SUCH THING AS A FREE LUNCH; means that there is always a cost, even if the cost is giving up a different opportunity without a dollar value1
4846225014rational self-interestindividuals pursue actions that will enable them to achieve their greatest satisfaction2
4846225015opportunity costthe thing you give up when you make any choice- it is the NEXT best option3
4846225016marginal analysiscomparisons of costs and benefits of creating one additional unit- or doing something one more time4
4846225018ceteris paribusother-things equal assumption; assumes that all other variables except those under immediate consideration are held constant5
4846225019microeconomicslooks at specific economic units such as businesses and consumer behavior6
4846225020macroeconomicsStudy of economics at the national level, total output, unemployment, inflation7
4846225024positive economicsstates economics by facts,avoiding value judgements8
4846225025normative economicsincorporates value judgements9
4846225026utilitythe pleasure, happiness, or satisfaction obtained from consuming a good or service.10
4846225027factors of productionLand, Labor, Capital, and Entrepreneurship11
4846225032command economy (socialism, communism)system that relies on public ownership of resources and the use of central planning; government makes most economic decisions12
4846225033market economyprivate ownership of resources; markets and prices coordinate economic activity; government plays a role in the economy by providing rules, enforcing contracts, providing public goods13
4846225035specializationan individual, business, or nation chose to produce whatever provides the most utility14
4846225070consumer goodsgoods made for direct consumption15
4846225071trade-offsall possible options16
4846225074PPC shifterschange in resource availability, change in technology or productivity,17
4846225075production possibilities curvea model showing the trade-offs between two economic choices; illustrates the concept of opportunity cost18
4846240728Mixed EconomyMarket-based economic system with limited government involvement19
5474661609LiquidityA measure of how quickly an asset can be converted to into another asset (or used to buy hamburgers)20
5474684964Interest rateThe % that a saver is paid OR the cost of borrowing21
5474879122CashMost Liquid asset possible22
5474892959CDFinancial asset- a way to save money that pays a better interest rate than savings account, but trades off some liquidity- Saver pays a penalty to get money back earlier23
5474910254BondFinancial Asset which can be traded or sold- the prices of bonds move in the opposite of interest rates24
7127628860Capital goodsCapital goods are things used to make other goods or services25

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