Econ Ch. 1
Terms
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- scarcity
- limited resources relative to wants and needs
- resources
- land, labor, machinery, and other inputs used to produce goods and services
- opportunity cost
- the best alternative forgone to produce or consume something else; what you five up to get something else.
- unemployment
- a situation in which resources are not fully used in production
- consumer goods
- goods that are consumed by consumers
- capital goods
- goods such as machinery and factories, which are used to produce other goods
- private goods
- goods provided by business firms
- public goods
- goods provided by the government
- law of supply
- the is a direct (positive) relationship between price and quantity supplied
- supply schedule
- a table showing the quantities that suppliers are willing to sell at alternative prices during a specified time period
- supply curve
- a graph showing the quantities that suppliers are willing to sell at alternative prices during a specified time period
- equilibrium
- a state of balance; a point at which quantity demanded equals quantity supplied
- surplus
- a situation in which quantity supplied is greater than quantity demanded
- equitable
- fair
- spillovers
- costs of benefits of private market activity shifted onto society at large
- market power
- the ability to influence the market price of a product
- Consumer price index (CPI)
- a measure of the average price level
- microeconomics
- the study of individual areas of activity within the total economy
- gross domestic product (GDP)
- total output of an economy
- private
- individual people and businesses
- public
- government
- economic growth
- a sustained increase in production, represented by an forward shift of the production possibilities curve.
- efficient
- using resources in such a way as to maximize the output from them
- inflation
- a rise in the average price level in the economy
- law of demand
- there is an inverse (negative) relationship between price and quantity demanded
- macroeconomics
- the study of the total economy
- pure competition
- a market in which many independent producers compete to sella standardized product to many independent buyers
- production possibilities curve
- an economic concept explaining scarcity and the need for choices; a graph showing alternate combinations of the maximum amounts of two different goods that can be produced during a particular time period if the economy's resources are efficiently and fully employed
- services
- activities (such as hair cuts, health care, and education) that are consumed (used) by consumers
- shortage
- a situation in which quantity demanded is greater than quantity supplied