question
opp. cost
answer
what you must give up in order to get it (besides money)
question
trade-off
answer
decide costs vs benefits
question
marginal decisions
answer
whether to do more or less
question
marginal analysis
answer
the study of marginal decisions
question
efficient
answer
makes some people better off without making other worse off
question
equity
answer
everyone gets his or her fair share
question
scarcity
answer
idea that there isn't enough for everyone
question
individual choice
answer
decision by an individual of what to do
question
resource
answer
anything that can be used to produce something else
question
incentive
answer
reward to change behavior
question
model
answer
simplified representation
question
other-things equal assumption
answer
means that all other relevant factors remain unchanged
question
production possibility frontier
answer
illustrates an economy of 2 goods where a trade-off in production is made (proportional scale).
question
factors of production
answer
resources used to create goods + services
question
technology
answer
technical means of producing goods and services
question
comparative advantage
answer
the opportunity cost of production is lower for me than all these jongbags.
question
absolute advantage
answer
where I can more effectively produce goods in every way w/ the same resources
question
barter
answer
when people directly exchange goods/services
question
circular flow diagram
answer
represents the cyclical transactions in an economy
question
household
answer
a group of people who share income
question
firm
answer
organization that produces goods and services for sale
question
factor markets
answer
where firms buy resources they need to produce goods/services
question
income distribution
answer
the way total income is divided among the owners of various factors of production
question
positive economics
answer
describes how economics actually works
question
normative economics
answer
describes how economics should work
question
forecast
answer
simple prediction of the future
question
competitive market
answer
a market where there are many buyers and sellers of the same good, none of which can influence price
question
supply and demand model
answer
displays the competitiveness of a market
question
demand schedule
answer
shows how much of a good or service consumers will want to buy at different prices
question
shift of the demand curve
answer
a change of the quantity demanded at any given price, represented by the change of the original demand curve to a new position, denoted by the new curve.
question
movement along the demand curve
answer
a change in quantity demanded of a good that is the result of a change in that goods' price
question
substitutes
answer
if a rise in price of one of the goods leads to an increase in the demand of another.
question
complements
answer
rise in price of one good leads to a decrease in demand of another
question
normal good
answer
a rise in income increases demand for a good
question
inferior good
answer
a rise in income decreases demand for a good
question
individual demand curve
answer
demonstrates quantity demanded vs. price for an individual
question
quantity supplied
answer
actual amount of a good/service producers are willing to sell at a specific price
question
supply schedule
answer
shows how much of a good/service producers will supply at different prices
question
supply curve
answer
quantity vs price
question
equilibrium
answer
where where quantity equals demand of a good/service
question
surplus
answer
quantity supplied exceeds quantity demanded
question
shortage
answer
quantity supplied does not meet quantity demanded
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