Unit 1 Terms Flashcards
the study of scarcity and choice
economics
a system for coordinating a society’s productive and consumptive activities
economy
economic measures that summarize data across different markets for goods, services, workers, and assets
economic aggregates
describes a market or economy that takes all opportunities to make some people better off without making other people worse off
efficient
the decision by an individual of what to do, which necessarily involves a decision of what not to do
individual choice
anything that offers rewards to people who change their behavior
incentives
the efforts of people in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes
entrepreneurship
a system where the industry is publicly owned and a central authority makes production and consumption decisions
command economy
manufactured goods used to make other goods and services
capital
a system where the decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decision
market economy
the study of marginal decisions
marginal analysis
the branch of economics that studies the overall ups and downs in the economy
macroeconomics
the branch of economics that studies how people make decisions and how those decisions interact
microeconomics
the rights of owners of valuable items, whether resources or goods, to dispose of those items as they choose
property rights
the branch of economic analysis that describes the way the economy actually works
positive economics
a graph that shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced. It illustrates the trade-offs facing an economy that produces only two goods
production possibilities curve (PPC)
all resources that come from nature, such as minerals, timber, and petroleum
land
the effort of workers
labor
the branch of economic analysis that makes prescriptions about the way the economy should work
normative economics
the real cost of an item: what you must give up in order to get it
opportunity cost
anything that can be used to produce something else
ex: land, labor, capital
resources
in short supply; when there is not enough of a resource available to satisfy all the various ways a society wants to use it
scare/scarcity
when you give up something in order to have something else
trade-off
a type of economy used in developing societies; is built around the way a society lives; goods/services determined by the people’s livelihood and are traded instead of sold
traditional economy
