Micro Noes 1 Flashcards
focuses on individual decision-making units and how they interact
Microeconomics
explores the economy as a whole
Macroeconomics
the fixed amount of goods or services available
Scarcity
an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces
Traditional Economy
an economic system in which the forces of supply and demand determine what goods and services are produced
Market Economy
an economic system in which the means of production are publicly owned
Command Economy
an economy which practiced characteristics of both command and market economies (supply and demand = large influence)
Mixed Economy
the cost of choosing; what you give up by choosing one option
Opportunity Cost
objects that can fulfill human wants/needs, provide utility
Goods
economic activity that is intangible; provides utility, but cannot be stored
Services
natural and human resources from which all goods and services must be produced
Endowment
satisfaction; economists assume maximizing this drives individual choice; measured in utils
Utility
the tendency of people to engage in activities that will lead to monetary gain
Profit Motive
the economic power of the individual in a free market
Consumer Sovereignty
requirements the government places on private firms and individuals to achieve the government’s goals
Government Regulation
additional increase of utility associated with consuming one more unit of a good or service
Marginal Utility
in a succession of units, the specific unit you are focusing on
Margin
the total satisfaction derived from consuming a specific quantity of a good or service; the total of marginal utilities for all individual units consumed
Total Utility
Other word for satisfy
Satiate
over-simplified decision-making process based on utility (consume until marginal utility =0)
Initial Decision
Maximization of Utility
Bliss Point
evaluating the impact of one additional unit
Marginal Analysis
A measure of utility
Util
initially, one input increases the initial successive units of input toward the output, but eventually this will add to less output
Diminishing marginal productivity
maximizing utility in light of scarcity
Balancing at the margin
utility diminishes the further in the future that utility is realized
Discounting the future
