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66 Cards in this Set
- Front
- Back
scarcity |
the limited nature of societys rsources |
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economics |
the study of how society manges its care resources |
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effieceiency |
the property of society getting the most it can from its scarece resources |
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equalitity |
the property of distributing economic prosperity uniformely among the members of society |
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opportunity cost |
whatever yu must give up to obtain some item |
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rational people |
people who systematicaly and purposefully do the best they can to achieve their objectives |
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marginal change |
a small incremntal adjustment to a plan of action |
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incentive |
something that induces a person to act |
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market economy |
an economy that allocates resources through the decentrialized deicions of many firms and households as they interact in markets for goods and services |
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property rights |
the ability of an individual to own and exercise control over scarce resources |
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market failure |
a situation in which a marke left on itws own fails to allocate resources efiecently |
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externaility |
the impact of one persons actions on the well being of a bystander |
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market power |
the ability of a single economic actor to have substantial influence on market prices |
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productivity |
the quanitty of goods and services produced from each unit of labor input |
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inflation |
an increase in the overall level of prices in the economy |
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business cycle |
fluctuation sin economic activity such as emplyment and production |
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factors of production |
the imputs or land labor capitol |
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circular flow diargram |
a visual model of the economy that shows how dollars flow through markets among household and firms |
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production possibilities froniter |
a graph that shows the comibations of output that the economy can possibly produce given the available factors of production and the availabe production technology |
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microeconomics |
the study of how households and firms make decions and how they interact in markets |
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macroeconomics |
the study of economy wide phenomena including inflation unemployment and economic growth |
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positive statements |
claims that atempt to escribe th world as it is |
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normative statements |
claims that attempt to prescribe how the world should be |
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absolute advatange |
the ability to produce a good using fewer imputs than another prodcer |
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opportunity cost |
whatever must be given up to ovbtain some item |
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comparative advantage |
the ability to produce a good at a lower opportunity cost than another produce |
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imports |
goods produced abroad and sold domestically |
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ecports |
goods produced domestically and sold abroad |
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principle number one |
people face trade offs |
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principle number two |
cost of something that your wiling to give up |
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principle number three |
people think at the margins |
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principle number four |
people respond to incentives |
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principle number five |
trades can make everyone better off |
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principle number six |
markets are usually good way to organize economic activity |
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principle number seven |
governments can sometimes improve market outcomes |
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principle number eight |
countries standard of living relies on the produciton of goods |
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principle number nine |
price rises when gov prints to much money |
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principle number ten |
society faces short run trade off between inflation and unemplyment |
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capitol |
something you own yoruself |
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land |
the area you rent or buy for your business |
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labor |
the workforce that is finishing your job for you |
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market |
a group of buyers and sellers of a particular good or servcice |
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competitive market |
a market in which there are many byers and many sellers o that each has a negligible impact on the market price |
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quantity demanded |
the amount of a good that buyers are wiling and able to purchase |
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law of demand |
the claim that other things being equal the quanitiy demanded of a pgood falls when the price of the good rises |
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demand schedule |
a table that shows the relationoship between theprice of a good and the quanity demanded |
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demand curve |
a graph of the relationship between the price of a good and the quanity demanded |
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normal good |
a god for which other things being equal and increase in income leads to an increase in demand |
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inferior good |
a good for whiich other thiing being equal and increase in income leads to a decrease in demand |
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substitutes |
two goods for which an increase in the price of one leads to an increase in the deamnd for the other |
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complements |
two goods for which an increase in the price of one leads to a decrease in the demand for the other |
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quanitity supplied |
the amount of a good that sellers are willing an able to sell |
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law of supply |
the claim that other things being equal the quanitity supplied of a good rises when the price of the good rises |
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supply schedule |
a table that shows the relatioship between the price of a good an the quanitty supplied |
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supply curve |
a graph of the relationhip between the price of a good and the quanitity supplied |
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equilibrium |
a situation in which the market price has reached the level at which quanity supplied equlas quantity demadned |
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equilibrium price |
the price that balances quanitty supplied and quanity demanded |
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equilibrium quanity |
the quantity supplied and the quantity demanded at the equilbrium price |
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suprlus |
to much of one thing |
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shortage |
quanitity demanded is greathe than quantity supplied |
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law of supply and demand |
the claim that the price of any good adjusts to bring the quanitty supplied and the quantity demanded fo rthat good into balance |
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elasticity |
a measure of the responsiveness of quantity demanded or quantiy suppled to a changein one of its determinants |
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price of elasticity of demand |
a measure of how much the quanitty demanded of a good responds to a change in the price of that good. |
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total revenue |
the amount paid by buyers and recieved by sellers of a good such that price of the good times quanitity sold |
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income elasticity of demand |
a measure of how much the quanitty demanded of a good responds to a change in income |
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cross price elasticity of demand |
how much of one item responds to the change in price of another good |