Module 1: TERMS-Intro to Microeconomcs Flashcards
The study of exchanges between individuals, organizations and countries.
Economics
The ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.
Absolute advantage
The economic idea that the particular combination of goods and services society produces represents the combination that society most desires
Allocative efficency
The ability of a party to produce a good or provide a service at a lower opportunity cost than another party
Comparative advantage
An economic efficiency standard concerned with the productivity of an economy over time
Dynamic efficiency
The economic principle states that prices adjust until the amount that people demand of a good is equal to the amount that is supplied
Equilibrium
The situation when an exchange between two individuals results in a “harm” or a “benefit” to a third party outside the exchange
Externality
The branch of economics that studies exchange decisions at the individual level by persons, suppliers, governments and countries.
Microeconomics
A graphical depiction of the exchange process
Market diagram
The economic idea that individuals seek as many goods and services as they can obtain
Maximization
The situation when an exchange between two individuals results in a “harm” or a “benefit” to a third party outside the exchange
Negative extenality
Economic opinion.
Normative economics
The good or service that is given up or foregone for what is obtained
Opportunity cost
The maximum or minimum of a quantity
Optimization
The harsh economic efficiency standard that asserts any change that harms any individual to any degree is inefficient
Pareto Efficiency
Economic data and verifiable information
Positive economics
The economic measure of efficiency that assesses an economy by its ability and organization to produces greater levels of output
Productive efficiency
A graph that shows all of the different combinations out output that can be produced given current resources and technology
Production possibilities curve
The economic idea that individuals have an internal set of personal preferences and values and individual actions are based upon those preferences and values
Self-interest
The economic idea that human wants for goods, services and resources exceed what is available.
Scarcity
An economic efficiency standard that promotes the greatest happiness for the greatest number of persons
Social efficiency
A person’s personal set of Values
Preference set
