Terms : Hide Images
| 10453836500 | economics | science of scarcity (study of choices) | 0 | |
| 10453837222 | scarcity | unlimited wants, but limited resources | 1 | |
| 10453837941 | microeconomics | Study of small economic units such as individuals, firms, and industries (ex: supply and demand in specific markets, production costs, labor markets, etc.) | 2 | |
| 10453839974 | macroeconomics | Study of the large economy as a whole or economic aggregates (ex: economic growth, government spending, inflation, unemployment, international trade etc.) | 3 | |
| 10453843293 | theoretical economics | generalizations & abstractions to make theories | 4 | |
| 10453844647 | policy statement | theories applied to fix problems or meet economic goals | 5 | |
| 10457670928 | positive economics | fact based, avoid value judgement (what is) | 6 | |
| 10453845706 | normative statement | include value judgement (what should be) | 7 | |
| 10453846225 | 5 key economic assumptions | 1) scarcity, 2) trade-off, 3) self-interest, 4) marginal costs & marginal benefits, 5) real life explained through simplified models | 8 | |
| 10453852028 | marginal analysis | making decisions based on increments (examples: going to the mall) | 9 | |
| 10453853698 | trade-offs | all alternatives given up when making a choice | 10 | |
| 10453854827 | opportunity cost | most desirable alternative given up in a choice | 11 | |
| 10453855930 | utility | satisfaction | 12 | |
| 10453857116 | marginal | additional (or change) | 13 | |
| 10453857117 | allocate | distribute | 14 | |
| 10453858632 | price | amount buyer pays | 15 | |
| 10453858633 | cost | amount seller pays to produce a good | 16 | |
| 10453859287 | investment | money spent by businesses to improve production | 17 | |
| 10453861739 | consumer goods | created for direct consumption (pizza) | 18 | |
| 10453862670 | capital goods | created for indirect consumption (oven) | 19 | |
| 10453864023 | 4 factors of production | 1) land: natural resources to produce goods/services, 2) labor: effort to do task for paid person, 3) capital: physical capital (human-made resource to create other goods/services) & human capital (skills/knowledge), 4)leaders who combine other factors of production to create goods/services, innovation & risk | 20 | |
| 10457673255 | 3 economic goods | what/how/for who goods/services should be produced | 21 | |
| 10457676091 | economic systems | include command economy, mixed economy, and free market economy | 22 | |
| 10457677371 | command economy | centrally-planned, communism, example: former Soviet Union | 23 | |
| 10457678766 | free market economy | laissez faire, capitalist economy | 24 | |
| 10457683114 | production possibilities curve | (ppc) (or frontier) model showing alternate ways economy can use scarce resources; graphically demonstrates scarcity, trade-offs, opportunity costs, & efficiency | 25 | |
| 10457685519 | 4 key assumptions on ppc | only 2 goods can be produced, full employment of resources, fixed resources (ceteris paribus), and fixed technology | 26 | |
| 10457686839 | production possibilities graph | area outside is impossible/unattainable, on the line is efficient, in the area is inefficient/unemployment |  | 27 |
| 10457688150 | constant opportunity cost | resources easily adaptable for producing either good; result in straight line ppc (not common) | 28 | |
| 10457694416 | law of increasing opportunity cost | resources not easily adaptable to produce both goods, so as produce more any good, opportunity cost (forgone production of another good) increase; result concave bowed out ppc | 29 | |
| 10467623525 | 2 types of efficiency | productive & allocative efficiency | 30 | |
| 10467624190 | productive efficiency | being produced least costly way; any point on production possibilities curve | 31 | |
| 10467625394 | allocative efficiency | products produced are most desired by society; optimal point on ppc depends on the society desires | 32 | |
| 10467630877 | 3 shifters of ppc | change in resource quantity of quality, change in technology, change in trade (allow more consumption but not production) | 33 | |
| 10472554345 | per unit opportunity cost | opportunity cost/units gained | 34 | |
| 10472555265 | absolute advantage | can produce most output or requires least amount of inputs (resources) | 35 | |
| 10472556029 | comparative advantage | producer w/ lowest opportunity cost | 36 | |
| 10472557060 | input | other number under (IOU) | 37 | |
| 10472557887 | output | other number over (OOO) | 38 | |
| 10477834036 | product market | place where goods & services produced by businesses sell to households | 39 | |
| 10477842687 | resource (factor) market | where resources are sold to businesses (include labor, land, entrepreneurship) | 40 | |
| 10477846181 | private sector | economy run by individuals & businesses | 41 | |
| 10477847281 | public sector | economy controlled by gov | 42 | |
| 10477848053 | factor payments | payments for the factors of production, namely rent, wages, interest, and profit | 43 | |
| 10477850058 | transfer payments | when government redistributes income (welfare, social security) | 44 | |
| 10477851238 | subsidies | gov payments to businesses | 45 | |
| 10477853403 | circular-flow diagram | a visual model of the economy that shows how dollars flow through markets among individuals, businesses, and the gov |  | 46 |
| 10488770857 | demand | different goods quantities consumers willing & able pay to buy at different prices | 47 | |
| 10488771910 | law of demand | inverse relationship b/t price & quantity demanded | 48 | |
| 10488772998 | substitution effect | changes in $ motivate consumers buy relatively cheaper substitute goods | 49 | |
| 10488774466 | income effect | changes in $ effect purchasing power of consumers' income | 50 | |
| 10488775644 | law of diminishing marginal utility | as you continue consume a product, you'll get less additional utility (satisfaction) from each unit consumed | 51 | |
| 10488778361 | 5 shifters in demand | tastes/preferences, # of consumers, price of related goods (substitutes & compliments), income (normal goods & inferior goods), & expectations | 52 | |
| 10488783534 | substitutes | something that can replace the product/service (milk & almond milk) | 53 | |
| 10488784321 | compliments | something that goes with the product/service (cereal and milk) | 54 | |
| 10488786145 | normal goods | income & demand for product directly related (includes luxury cars, sea food, houses) | 55 | |
| 10488788079 | inferior goods | income & demand for product inversely related (such as used cars, used clothes) | 56 | |
| 10488789594 | demand graph | a graphic representation of a demand schedule; vertical axis shows price and horizontal axis shows quantity |  | 57 |
| 10488791046 | ceteris paribus | all other things held constant (when this assumption is dropped, movement no longer occur along demand curve, entire demand curve shifts) | 58 | |
| 10488792691 | shift | means that at same prices, more ppl willing & able purchase it (price doesn't shift curve) | 59 | |
| 10488797405 | law of supply | direct relationship b/t price & quantity supplied | 60 | |
| 10488798191 | supply | willing & able to sell/produce at different prices | 61 | |
| 10488798673 | 5 shifters of supply | price of resources, # of producers, technology, taxes & subsidies, expectations | 62 | |
| 10488800277 | supply graph | a graph of the relationship between the price of a good and the quantity supplied |  | 63 |
| 10507253962 | double shift rule | if 2 curves shift at same time, either price or quantity will be indeterminate/ambiguous | 64 | |
| 10507257652 | S & D analysis | use this to show what happens to price & quantities | 65 | |
| 10515473756 | consumer surplus | difference b/t what you're willing to & what you actually pay; CS=buyer's max-price | 66 | |
| 10515480483 | producer's surplus | difference b/t price seller received & how much willing sell; PS=price-seller's minimum | 67 | |
| 10515484084 | price ceiling | max legal price seller can change for product; goal: make affordable by keeping price from reaching equilibrium; results is black market | 68 | |
| 10515488557 | price floor | minimum legal price seller can sell product; goal keep price high by keeping price from falling to equilibrium; must be above equilibrium | 69 | |
| 10515494137 | elasticity | show how sensitive quantity is to price change | 70 | |
| 10515495907 | inelastic demand | quantity insensitive to price (usually necessity) | 71 |
