Unit 1 Vocabualry Flashcards
What is Absolute Advantage?
Ability to produce more of a good/service than any other producer with the same quality of resources
What does Comparative Advantage refer to?
Ability to produce goods/services at a lower cost than its competitor
What are Exports?
Goods and services sold to other countries
What are Imports?
Goods and services purchased from other countries
Define Opportunity Cost.
the value of the forgone alternative action or decision.
What are Capital Goods?
Manufactured goods used to make other goods/services
What are Inputs in economics?
A good/service that is used to produce another good or service
Define Outputs.
The quantity of goods and services produced
What are Trade Offs?
When you give up something in order to have something else
Define Scarcity.
Demand for a good is greater than the ability to produce the good
What is a Recession?
A period of economic downturn when output and employment are falling
What are Substitutes?
A product or service that can be easily replaced with another by consumers
What are Complements?
Two goods for which a rise in the price of one leads to a decrease in the demand for the other
Define Equilibrium Price.
the price at which the quantity demanded equals the quantity supplied
What is Equilibrium Quantity?
When there is no shortage or surplus of a product in the market
What is a Competitive Market?
A market with many buyers and sellers of the same goods or services where none can influence the price
What does the Production Possibilities Curve/Frontier model show?
Alternative ways an economy can use its scarce resources
Define Surplus.
the simple state of supply out weighting the demand (known as excess supply)
What is a Shortage?
Where the quantity of a product or service demanded is greater than the quantity supplied at the market
Economic Way of Thinking-
Marginal analysis (examining the additional value/ benefits gained from a particular activity compared to the costs of that same activity)
