question
Scarcity
answer
The limited nature of society's resources.
question
Economics
answer
The study of how society manages its scarce resources.
question
Efficiency
answer
The property of society getting the most it can from its scarce resources.
question
Equality
answer
The property of distributing economic prosperity uniformly among the members of society.
question
Opportunity Cost
answer
Whatever must be given up to obtain some item
question
Rational People
answer
People who systematically and purposefully do the best they can to achieve their objectives.
question
Marginal Change
answer
A small incremental adjustment to a plan of action.
question
Incentive
answer
Something that induces a person to act.
question
Market Economy
answer
An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.
question
Property Rights
answer
The ability of an individual to own and exercise control over scarce resources.
question
Market Failure
answer
A situation in which a market left on its own fails to allocate resources efficiently.
question
Externality
answer
The impact of one person's actions on the well-being of a bystander.
question
Market Power
answer
The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices.
question
Productivity
answer
The quantity of goods and services produced from each unit of labor input.
question
Inflation
answer
An increase in the overall level of prices in the economy.
question
Business Cycle
answer
Fluctuations in economic activity, such as employment and production.
question
Circular-Flow Diagram
answer
A visual model of the economy that shows how dollars flow through markets among households and firms.
question
Production Possibilities Frontier
answer
A graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology.
question
Microeconomics
answer
The study of how households and firms make decisions and how they interact in markets.
question
Macroeconomics
answer
The study of economy-wide phenomena, including inflation, unemployment, and economic growth.
question
Positive Statements
answer
Claims that attempt to describe the world as it is.
question
Normative Statements
answer
Claims that attempt to prescribe how the world should be.
question
Absolute Advantage
answer
The ability to produce a good using fewer inputs than another producer.
question
Comparative Advantage
answer
The ability to produce a good at a lower opportunity cost than another producer.
question
Imports
answer
Goods produced abroad and sold domestically.
question
Exports
answer
Goods produced domestically and sold abroad.
question
Market
answer
A group of buyers and sellers of a particular good or service.
question
Competitive Market
answer
A market in which there are many buyers and many sellers so that each has a negligible impact on the market price
question
Quantity Demanded
answer
The amount of a good that buyers are willing and able to purchase.
question
Law of Demand
answer
The claim that, other things being equal, the quantity demanded of a good falls when the price of the goods rises.
question
Demand Schedule
answer
A table that shows the relationship between the price of a good and the quantity demanded.
question
Demand Curve
answer
A graph of the relationship between the price of a good and the quantity demanded.
question
Normal Good
answer
A good for which, other things being equal, an increase in income leads to an increase in demand.
question
Inferior Good
answer
A good for which, other things being equal, an increase in income leads to a decrease in demand.
question
Substitutes
answer
Two goods for which an increase in the price of one leads to an increase in the demand for the other.
question
Complements
answer
Two goods for which an increase in the price of one leads to a decrease in the demand for the other.
question
Quantity Supplied
answer
The amount of a good that sellers are willing and able to sell.
question
Law of Supply
answer
The claim that, other things being equal, the quantity supplied of a good rises when the price of the good rises.
question
Supply Schedule
answer
A table that shows the relationship between the price of a good and the quantity supplied.
question
Supply Curve
answer
A graph of the relationship between the price of good and the quantity supplied.
question
Equilibrium
answer
A situation in which the market price has reached the level at which quantity supplied equals quantity demanded.
question
Equilibrium price
answer
The price that balances quantity supplied and quantity demanded.
question
Equilibrium quantity
answer
The quantity supplied and the quantity demanded at the equilibrium price.
question
Surplus
answer
A situation in which quantity supplied is greater than quantity demanded.
question
Shortage
answer
A situation in which quantity demanded is greater than quantity supplied.
question
Law of Supply and Demand
answer
The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
