– Microeconomics 20th edition, Chapter 1-3 terms

Social science concerned with making optimal choices under conditions of scarcity

A viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions

Restricts options and demand choices

To obtain more of one thing, society forgoes the opportunity of getting the next best thing

The pleasure, happiness, or satisfaction obtained from consuming a good or service

Comparisons of marginal benefits and marginal costs, usually for decision making

The procedure for the systematic pursuit of knowledge involving the observation of facts and formulation and testing hypotheses to obtain theories, principles, and laws

Statement about economic behavior or the economy that enables prediction of the probable effects of certain actions

Assumption that factors other than those being considered do not change

Part of economics concerned with decision making by individuals

Examines the performance and behaviors of the economy as a whole

Collection of specific economic units treated as if they were one unit

Focuses on facts and cause-and-effect relationships

Incorporates value judgements about what the economy should be like or what particular policy actions should be recommended

Need to make choices because economic wants exceed needs

A line that shows the different combinations of two products a consumer can purchase with a specific money income, given the products prices

The land, labor, capital, and entrepreneurial ability that are used to produce goods and services; the factors of production

Any and all natural resources that are used to produce goods and services

Any mental and physical exertion on the part of a human being that is used in the production of a good or service, one of the four economic resources

All manufactured human made resources used in producing consumer goods and services; goods that do not directly satisfy human wants

Spending that pays for production and accumulation of capital goods

The human resource that combines the other economic resources of land, labor, and capital to produce new products or make innovations in the productions of existing products; provided by entrepreneurs

Individuals who provide entrepreneurial ability to firms by setting strategy, advancing innovations, and bearing the financial risk if their firms do poorly

The four economic resources: land, labor, capital, and entrepreneurial ability

Products and services that satisfy human wants directly

Products that satisfy our wants indirectly by making possible more efficient production of consumer goods

A curve showing different combos of two goods or services that can be produced in a full employment, full production economy where the available supplies of resources and technology are fixed

The principle that as the production of a good increases, the opportunity cost of producing an additional unit rises

An outward shift int he production possibilities curve that results from an increase in resource supplies or quality or an improvement in technology; an increase of real output of gross domestic product or real output per capita