Unit 1 Vocabulary

Question 1

the study of scarcity and choice

Answer 1

economics

Question 2

decisions by individuals about what to do, which necessarily involve decisions about what not to do

Answer 2

individual choice

Question 3

a system for coordinating a society’s productive and consumptive activities

Answer 3

economy

Question 4

the decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions

Answer 4

Market economy

Question 5

industry is publicly owned and a central authority makes production and consumption decisions

Answer 5

command economy

Question 6

rewards or punishments that motivate particular choices

Answer 6

incentives

Question 7

establish ownership and grant individuals the right to trade goods and services with each other

Answer 7

property rights

Question 8

is the study of costs and benefits of doing a little bit more of an activity vs. a little bit less

Answer 8

marginal analysis

Question 9

anything that can be used to produce something else

Answer 9

resource

Question 10

all resources that come from nature, such as minerals, timber, and petroleum

Answer 10

land

Question 11

the effort of workers

Answer 11

labor

Question 12

manufactured goods used to make other goods and services

Answer 12

capital

Question 13

the efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes`

Answer 13

entrepreneurship

Question 14

not available in sufficient quantities to satisfy all the various ways a society wants to use it

Answer 14

scarce resource

Question 15

the value of the next best alternative that you must give up in order to get the item

Answer 15

opportunity cost

Question 16

the study of how individuals, households, and firms make decisions and how those decisions interact

Answer 16

microeconomics

Question 17

concerned with the overall ups and downs of the economy

Answer 17

macroeconomics

Question 18

economic measures that summarize data across many different markets

Answer 18

economic aggregates

Question 19

branch of economic analysis that describes the way the economy actually works

Answer 19

positive economies

Question 20

makes prescriptions about the way the economy should work

Answer 20

normative economies

Question 21

the alternation between economic downturns, known as recessions, and economic upturns, known as expansions

Answer 21

business cycle

Question 22

periods of economic downturns when output and employment are falling

Answer 22

recessions

Question 23

periods of economic upturns when output and employment are rising

Answer 23

expansions

Question 24

very deep and prolonged downturn

Answer 24

depression

Question 25

the number of people who are currently working for pay in the economy

Answer 25

employment

Question 26

the number of people who are actively looking for work but aren't currently employed

Answer 26

unemployment

Question 27

equal to the sum of employment and unemployment

Answer 27

labor force

Question 28

percentage of the labor force that is unemployed

Answer 28

unemployment rate

Question 29

the quantity of goods and services produced

Answer 29

output

Question 30

economy's total production of goods and services for a given time period

Answer 30

aggregate output

Question 31

rising overall price level

Answer 31

inflation

Question 32

falling overall price level

Answer 32

deflation

Question 33

the overall price level is changing only slowly if at all

Answer 33

price stability

Question 34

an increase in the maximum amount of goods and services an economy can produce

Answer 34

economic growth

Question 35

a simplified representation used to better understand a real-life situation

Answer 35

model

Question 36

all other relevant factors remain unchanged (ceteris paribus assumption)

Answer 36

the other things equal assumption

Question 37

you give up something in order to have something else

Answer 37

trade-off

Question 38

illustrates the trade offs facing an economy that produces only two goods; shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced

Answer 38

production possibilities curve

Question 39

there is no way to make anyone better off without making at least one person worse off

Answer 39

efficient

Question 40

produces at a point on its PPC

Answer 40

production efficiency

Question 41

produces at the point along its PPC that makes consumers as well off as possible

Answer 41

allocative efficiency

Question 42

market economy; individuals provide goods and services to others and receive goods and serves in return

Answer 42

trade

Question 43

people can get more of what they want through trade than the could if they tried to be self-sufficient; each person specializes in the task that he or she is good at preforming

Answer 43

gains from trade; specilization

Question 44

the opportunity cost of producing the good or service is lower for that individual than for other people

Answer 44

comparative advantage

Question 45

can make more of it with a given amount of time and recourses

Answer 45

absolute advantage

Question 46

indicate the rate at which one good can be exchanged for another

Answer 46

terms of trade

Question 47

a measure that can take on more than one value

Answer 47

variable

Question 48

solid horizontal line that goes through the origin on a graph

Answer 48

x axis

Question 49

solid vertical line that goes through the origin on a graph`

Answer 49

y axis

Question 50

the value of one variable directly influences or determines the value of the other variable

Answer 50

casual relationship

Question 51

determining variable in a casual relationship

Answer 51

independent variable

Question 52

determined variable in a casual relationship

Answer 52

dependent variable

Question 53

line on a graph

Answer 53

curve

Question 54

a curve that shows the relationship between two variables is a straight line

Answer 54

linear relationship

Question 55

the curve is not a straight line

Answer 55

nonlinear relationship

Question 56

when an increase in one variable is associated with an increase in the other variable

Answer 56

positive relationship

Question 57

when an increase in one variable is associated with a decrease in the other variable

Answer 57

negative relationship

Question 58

indicates the value of the x variable when the value of the y variable is zero

Answer 58

horizontal intercept

Question 59

indicates the value of the y variable when the value of the x variable is zero

Answer 59

vertical intercept

Question 60

measure of how steep it is; indicates how sensitive the y is to a change in the x

Answer 60

slope

Question 61

slope changes

Answer 61

nonlinear curve

Question 62

the value of that number without a minus sign

Answer 62

absolute value

Question 63

point along a curve with the largest value of y

Answer 63

maximum point

Question 64

point along a curve with the smallest value of y

Answer 64

minimum point

Question 65

has successive dates on the horizontal axis and the values of a variable that occurred on those dates on the vertical axis

Answer 65

time-series graph

Question 66

each point corresponds to an actual observation of the x and y

Answer 66

scatter diagram

Question 67

uses bars of various heights or lengths to indicate values of a variable

Answer 67

bar graph

Question 68

the technical means of producing goods and services

Answer 68

technology