AP Economics Vocab Flashcards

828886376	economics	Social science concerned with how individuals, institutions, and society make optimal (best) choices under the condition of scarcity
828886377	scarcity	wants and needs > resources
828886378	utility	the pleasure, happiness or satisfaction obtained from consuming a good or service
828886379	marginal benefit	the additional benefit of consuming one extra of a good or sevice; marginal means additional
828886380	marginal cost	the additional cost of producing an extra unit of a good or service
828886381	microeconomics	part of economics concerned with individual units; small-scale view
828886382	macroeconomics	examines the economy as awhole or its basic subdivisions or aggregates such as the government (G), households (counsumers-C), business sectors (Ib) or international trade (Ex-Im or Nx); broader view
828886383	positive economics	focuses on facts, data and cause and effect relationships; "what is"
828886384	normative economics	value judgments about the economy SHOULD be like; "what ought to be"
828886385	trade-off	alt uses for resources or time
828886386	opportunity cost	the value of what is lost when we make a choice about how to use a resource or time; not just money but opportunities lost
828886387	factors of production	resources used to produce goods and services; land, labor, capital and entrepreneurship
828886388	land	natural resources used to produce goods and services
828886389	labor	human capital; human skills and abilities
828886390	capital	resources (not money) that can be used to produce goods and services i.e. technology
828886391	entrepreneurship	combine land, labor and capital in new ways to produce goods or services
828886392	consumer	people who buy or use goods/services
828886393	producers	people who produce goods/services
828886394	consumption	the act done by the consumer
828886395	investment	business buying capital, or inventories or people buying newly constructed houses; not money
828886396	production possibilities curve/ frontier (PPC or PPF)	model of an economy which shows combinations of ONLY 2 goods that can be produced using scarce resources
828886397	constant opportunity cost	when factors of production are perfectly substitutable for producting two goods
828886398	increasing opportunity cost	when factors of production aren't perfectly substitutable for producting two goods
828886399	allocative efficiency	the condition that is met when the marginal benefit of consuming something equals the marginal cost of producing it
828886400	productive efficiency	producing at the lowest avg total cost; the condition that is met when producing on the PPC
828886401	economic growth	an outward shift of the PPF that results from an increase in resource supplies or improvement in technology; permanent
828886402	technology	body of knowledge and techniques that can be used to combine economic resources to produce goods and services
839494139	command economy	an economy that relies on government to determine who gets what
839494140	market	happens whenever producers and consumers come together to exchange goods and services
839494141	market economy	an economy that relies on people motivated by their own self-interest to use markets to meet their needs and wants
839494142	mixed economy	an economy that sometimes uses markets and sometimes government to determine how people's needs and wants are met
839494143	circular flow model	illustrates the flow of goods and services, resources and money in a market economy; note the goods and services and resources flow one directiona nd the money flows the opposite direction
839494144	resource/factor market	market where resources are bought and sold
839494145	product market	market where goods and services produced by businesses are bought and sold
839494146	households	people that provide the economy with factors of production in the resource market and purchase goods and services in the product market; consumers
839494147	businesses/firms	purchase resources from the resource market to produce goods and services for the product market