1.1 Flashcards
Individual choice
The decisions by individuals about what to do, which necessarily involve decisions about what not to do.
Economy
A system for coordinating a society’s productive and consumptive activities.
Market Economy
The decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions.
Resource
Anything that can be used to produce something else.
Land
All resources that come from nature, such as minerals, timber and petroleum.
Labor
The effort of workers.
Capital
Manufactured goods used to make other goods and services.
Entrepreneurship
The efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes.
Scarce
A resource is not available in sufficient quantities to satisfy all the various ways a society wants to use it.
Opportunity Cost
What you give up in order to get it.
Microeconomics
The study of how people make decisions and how those decisions interact.
Macroeconomics
Studied the overall ups and downs in the economy.
Economic aggregates
Economic measures that summarize data across many different markets.
Positive Economics
The branch of economic analysis that describes the way the economy actually works.
Normative Economics
Prescriptions about the way the economy should work.
