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AP Macroeconomics > Exam #1 Vocab > Flashcards

Exam #1 Vocab Flashcards

1
Q

capital

A

Final goods used in the production of other goods. Ex: exquipment, structures, etc.

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2
Q

capital-intensive

A

Production processes that use a high ratio of capital to labor inputs.

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3
Q

ceteris paribus

A

The assumption of nothing else changing.

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4
Q

comparative advantage

A

The ability of a country to produce a specific good at a lower opportunity cost than its trading partners.

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5
Q

complementary goods

A

Goods frequently consumed in combination; when the price of x rises, the demand for good y falls, ceteris paribus.

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6
Q

demand

A

The ability and willingness to buy specific quantities of a good at alternate prices in a given time period, ceteris paribus.

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7
Q

demand curve

A

A curve describing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus.

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8
Q

demand schedule

A

A table showing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus.

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9
Q

economic growth

A

An increase in output (read GDP); an expansion of production possibilities.

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10
Q

economics

A

The study of how best to allocate scarce resources among competing uses.

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11
Q

efficiency

A

Maximum output of a good from the resources used in production.

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12
Q

entrepreneurship

A

The assembling of resources to produce new or improved products and technologies.

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13
Q

equilibrium price

A

The price at which the quantity of a good demanded in a given time period equals the quantity supplied.

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14
Q

exports

A

Goods and services sold to foreign buyers.

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15
Q

externalities

A

Costs (or benefits) of a market activity borne by a third party.

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16
Q

factor market

A

Any place where factors of production (ex: land, labor, capital) are bought and sold.

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17
Q

factors of production

A

Resource inputs used to produce goods and services, such as land, labor, capital, and entrepreneurship.

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18
Q

government failure

A

Government intervention that fails to improve economic outcomes.

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19
Q

gross domestic product (GDP)

A

The total market value of all final goods and services produced within a nation’s borders in a given time period.

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20
Q

human capital

A

The knowledge and skills possessed by the workforce.

21
Q

imports

A

Goods and services purchased from foreign sources.

22
Q

income quintile

A

One-fifth of the population, rank-ordered by income (ex: top fifth).

23
Q

income transfers

A

Payments to individuals for which no current goods or services are exchanged, ex: Social Security, welfare, unemployment benefits.

24
Q

investment

A

Expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories.

25
Q

laissez faire

A

The doctrine of “leave it alone”, of nonintervention by government in the market mechanism.

26
Q

law of demand

A

The quantity of a good demanded in a given time period increases as its price falls, ceteris paribus.

27
Q

law of supply

A

The quantity of a good supplied in a given time period increases as its price increases, ceteris paribus.

28
Q

macroeconomics

A

The study of aggregate economic behavior, of the economy as a whole.

29
Q

market demand

A

The total quantities of a good or service people are willing and able to buy at altenative prices in a given time period; the sum of individual demands.

30
Q

market failure

A

An imperfection in the market mechanism that prevents optimal outcomes.

31
Q

market mechanism

A

The use of market prices and sales to signal desired outputs (0r resource allocations).

32
Q

market shortage

A

The amount by which the quantity demanded exceeds the quantity supplied at a given price; excess demand.

33
Q

market supply

A

The total quantities of a good that sellers are willing and able to sell at alternative prices in a given time period, ceteris paribus.

34
Q

market surplus

A

The amount by which the quantity supplied exceeds the quantity demanded at a given price; excess supply.

35
Q

microeconomics

A

The study of individual behavior in the economy, of the components of the larger economy.

36
Q

mixed economy

A

An economy that uses both market signals and government directives to allocate goods and resources.

37
Q

monopoly

A

A firm that produces the entire market supply of a particular good or service.

38
Q

net exports

A

The value of exports minus the value of imports.

39
Q

opportunity cost

A

The most desired goods or services that are forgone to obtain something else.

40
Q

per capita GDP

A

The dollar value of GDP divided by the total population; average GDP.

41
Q

price ceiling

A

Upper limit imposed on the price of a good.

42
Q

price floor

A

Lower limit set for the price of a good.

43
Q

product market

A

Any place where finished goods and services (products) are bought and sold.

44
Q

production possibilities

A

The alternative combinations of final goods and services that could be produced in a given time period with all avaliable resources and technology.

45
Q

productivity

A

Output per unit of input, such as output per labor-hour.

46
Q

scarcity

A

Lack of enough resources to satisfy all desired uses of those resources.

47
Q

shift in demand

A

A change in the quantity demanded at any (every) given price.

48
Q

substitute goods

A

Goods that substitute for each other; when the price of good x rises, the demand for good y increases, ceteris paribus.

49
Q

supply

A

The ability and willingness to sell (produce) specific quantities of a good at alternative prices in a given time period, ceteris parabus.

AP Macroeconomics (6 decks)

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