Micro Noes 1

Question 1

focuses on individual decision-making units and how they interact

Answer 1

Microeconomics

Question 2

explores the economy as a whole

Answer 2

Macroeconomics

Question 3

the fixed amount of goods or services available

Answer 3

Scarcity

Question 4

an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces

Answer 4

Traditional Economy

Question 5

an economic system in which the forces of supply and demand determine what goods and services are produced

Answer 5

Market Economy

Question 6

an economic system in which the means of production are publicly owned

Answer 6

Command Economy

Question 7

an economy which practiced characteristics of both command and market economies (supply and demand = large influence)

Answer 7

Mixed Economy

Question 8

the cost of choosing; what you give up by choosing one option

Answer 8

Opportunity Cost

Question 9

objects that can fulfill human wants/needs, provide utility

Answer 9

Goods

Question 10

economic activity that is intangible; provides utility, but cannot be stored

Answer 10

Services

Question 11

natural and human resources from which all goods and services must be produced

Answer 11

Endowment

Question 12

satisfaction; economists assume maximizing this drives individual choice; measured in utils

Answer 12

Utility

Question 13

the tendency of people to engage in activities that will lead to monetary gain

Answer 13

Profit Motive

Question 14

the economic power of the individual in a free market

Answer 14

Consumer Sovereignty

Question 15

requirements the government places on private firms and individuals to achieve the government’s goals

Answer 15

Government Regulation

Question 16

additional increase of utility associated with consuming one more unit of a good or service

Answer 16

Marginal Utility

Question 17

in a succession of units, the specific unit you are focusing on

Answer 17

Margin

Question 18

the total satisfaction derived from consuming a specific quantity of a good or service; the total of marginal utilities for all individual units consumed

Answer 18

Total Utility

Question 19

Other word for satisfy

Answer 19

Satiate

Question 20

over-simplified decision-making process based on utility (consume until marginal utility =0)

Answer 20

Initial Decision

Question 21

Maximization of Utility

Answer 21

Bliss Point

Question 22

evaluating the impact of one additional unit

Answer 22

Marginal Analysis

Question 23

A measure of utility

Answer 23

Util

Question 24

initially, one input increases the initial successive units of input toward the output, but eventually this will add to less output

Answer 24

Diminishing marginal productivity

Question 25

maximizing utility in light of scarcity

Answer 25

Balancing at the margin

Question 26

utility diminishes the further in the future that utility is realized

Answer 26

Discounting the future