AP Macroeconomics Review Flashcards

6783745957	Economics	The study of scarcity and choice; how to allocate scarce resources to meet unlimited wants.	0
6783748167	market economy	The basic questions of what to produce, how to produce, and for whom to produce is made by individuals. Individuals also own and control the factors of production.	1
6783751591	command economy	The basic questions of what to produce, how to produce, and for whom to produce is made by the government/central planners. The factors of production are publicly owned (government ownership).	2
6783756220	Incentives	Rewards that motivate particular choices.	3
6783756948	marginal analysis	Considering the next or additional costs and benefits of a choice.	4
6783760020	Factors of Production/Productive Resources	Land, labor, capital, entrepreneurship.	5
6783760838	land	Natural resources used in production.	6
6783762191	labor	Quantity and quality of workers.	7
6783763448	entrepreneurship	Efforts by those who organize resources of production, taking of risks to create new businesses, and innovating to develop new products and production processes.	8
6783769415	capital	Manufactured goods used to produce other goods and services.	9
6783773090	opportunity cost	The real cost of any choice; the next best alternative.	10
6783776692	Microeconomics	Study of how individuals, households, and firms make decisions and how those decisions interact.	11
6783778418	Macroeconomics	Study concerned with the overall ups and downs in the entire economy. Big picture -- RGDP, PL, UR,....	12
6783781362	Economic aggregates	Economic measures that summarize data across many different markets.	13
6783784298	Four phases of the business cycle	Expansion, peak, contraction (recession), and trough.	14
6783787338	labor force	The sum of the number of employed persons and unemployed persons in an economy. To be unemployed, one must be over the age 16 and actively seeking employment.	15
6783790984	inflation	An increase in the overall price level.	16
6783792197	deflation	A decrease in the overall price level.	17
6783793070	disinflation	A decrease in the rate of inflation - note that inflation still exists but at a lower rate than before.	18
6783795741	Three goals of the Macroeconomy	Economic Growth (measured by RGDP); Price Stability (measured by CPI); and the Unemployment Rate.	19
6783798800	Economic growth	An increase in the maximum amount of goods and services (or potential output) an economy can produce. Can be illustrated by a rightward shift of the LRAS and an outward shift of the PPC.	20
6783810038	Production possibilities curve/frontier	illustrates the trade-offs facing an economy that produces only two goods or categories of goods. It shows the maximum quantity of one good that can produced at each possible quantity of the other good produced. It can be used to illustrate scarcity, choice, opportunity cost, efficiency, inefficiency, economic growth, and increasing opportunity cost (bowed out from the origin) and constant opportunity cost (straight line).	21
6783822386	absolute advantage	When one producer can produce more of a good or service than another producer with a given amount of time/resources.	22
6783825420	comparative advantage	When one producer can produce a good at a lower opportunity cost than another producer.	23
6783829616	terms of trade	The rate at which one good/service can be exchanged for another. Each party must be better off as a result of specialization and trade. In comparative advantage problems, it lies between the two opportunity costs.	24
6783838499	demand curve/demand schedule	shows how much of a good or service consumers will be willing and able to buy at various prices in a given time period.	25
6783840661	quantity demanded	The actual amount of a good or service consumers are willing and able to buy at a specific price.	26
6783846213	law of demand	Says that there is an inverse, or opposite relationship between price and quantity demanded.	27
6783849333	Change in demand	Shift in the demand curve caused by a change in one of the determinants of demand (tastes and preferences, consumer population, consumer income, prices of related goods (complements and substitutes), and consumer expectations. Illustrated by a shift of the demand curve.	28
6783853804	Change in quantity demanded	Movement along the demand curve from one particular price to another -- reflects the law of demand.	29
6783857431	Supply curve/schedule	Shows the amount that producers are willing and able to supply a market at various prices in a given time period.	30