1st set Flashcards
Microeconomics
focuses on individual decision-making units and how they interact
Scarcity
the fixed amount of goods or services available
Elasticity
amount that demand responds to market conditions
Traditional economy
an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rule and manner of their distribution also referred to as a subsistence economy, a traditional economy is defined by bartering and trading
Long run supply line
supply is determined by demand
Command economy
an economic system in which the means of production are publicly owned and economic activity is directed by a central government or portion of the government
Market economy
an economic system in which the forces of supply and demand determine what goods and services are produced
Margin
in a succession of units, the specific unit you are focusing on
Mixed economy
an economy which practiced characteristics of both command and market economies; supply and demand largely influence the economy, but there is government intervention to meet certain economic goals
Opportunity cost
the cost of choosing; what you give up by choosing one option
Goods
objects that can fulfill human wants/needs, provide utility
Services
economic activity that is intangible; provides utility, but cannot be stored
Satiate
satisfy
Bliss point
maximization of utility
Marginal analysis
evaluating the impact of one additional unit
Util
a measure of utility (this is an abstract concept)
Discounting the future
utility diminishes the further in the future that utility is realized
Commodity money
items that function as money but are also valuable themselves
Inelastic
insignificant change in demand regardless of market conditions
Profit motive
the tendency of people to engage in activities that will lead to monetary gain
