AP Macro Unit 1 Flashcards

7456590655	scarcity	the basic economic problem; it is a lack of needed or wanted resources relative to the demand for the resources.	0
7456590657	rational self-interest	individuals pursue actions that will enable them to achieve their greatest satisfaction	1
7456590658	opportunity cost	the thing you give up when you make any choice- it is the NEXT best option	2
7456590659	marginal analysis	comparisons of costs and benefits of creating one additional unit- or doing something one more time	3
7456590660	ceteris paribus	other-things equal assumption; assumes that all other variables except those under immediate consideration are held constant	4
7456590661	microeconomics	looks at specific economic units such as businesses and consumer behavior	5
7456590662	macroeconomics	Study of economics at the national level, total output, unemployment, inflation	6
7456590663	positive economics	states economics by facts,avoiding value judgements	7
7456590664	normative economics	incorporates value judgements	8
7456590665	utility	the pleasure, happiness, or satisfaction obtained from consuming a good or service.	9
7456590666	factors of production	Land, Labor, Capital, and Entrepreneurship	10
7456590667	command economy (socialism, communism)	system that relies on public ownership of resources and the use of central planning; government makes most economic decisions	11
7456590668	market economy	private ownership of resources; markets and prices coordinate economic activity; government plays a role in the economy by providing rules, enforcing contracts, providing public goods	12
7456590669	specialization	an individual, business, or nation chose to produce whatever provides the most utility	13
7456590670	consumer goods	goods made for direct consumption	14
7456590671	trade-offs	all possible options	15
7456590672	PPC shifters	change in resource availability, change in technology or productivity,	16
7456590673	production possibilities curve	a model showing the trade-offs between two economic choices; illustrates the concept of opportunity cost	17
7456590674	Mixed Economy	Market-based economic system with limited government involvement	18
7456590676	Interest rate	The % that a saver is paid OR the cost of borrowing	19
7456590680	Capital goods	Capital goods are things used to make other goods or services	20