Ceteris Paribus Choice at the Margin Constant Dependent Variable Economics Fallacy of False Cause Free Good Hypothesis Independent Variable Law Macroeconomics Margin Microeconomics Model Normative Statement Opportunity Cost Positive Statement Scarce Good Scarcity Scientific Method Theory Variable Capital Command Socialist Economy Comparative Advantage Economic Growth Economic System Efficient Production Entrepreneur Factors of Production Financial Capital Full Employment Human Capital Inefficient Production Labor Law of Increasing Opportunity Cost Market Capitalist Economy Mixed Economies Natural Resources Production Possibilities Curve Production Possibilities Model Specialization Technology Utility Change in Demand Change in Quantity Demanded A Latin phrase all other things unchanged A decision to do a little more or a little less of something Something whose value does not change A variable that responds to change A social science that examines how people choose among the alternatives available to them The incorrect assumption that one event causes another because the two events tend to occur together A good for which the choice of one use does not require that another given up An assertion of a relationship between two or more variables that could be proven to be false A variable that induces a change A theory that has been subjected to even more testing and that has won virtually universal acceptance The branch of economics that focuses on the impact of choices on the total or aggregate level of economic activity The current level of an activity The branch of economics that focuses on the choice made by consumers and firms and the impacts those choices have on individual markets A set of simplifying assumptions about some aspect of the real world A statement that makes a value judgement The value of the best alternative forgone in making any choice A statement of fact or hypothesis A good for which the choice of one alternative requires that another be given up The condition of having to choose among alternatives A systematic set of procedure through which knowledge is created A hypothesis that has not been rejected after widespread testing and that wins general acceptance Something who s value can change A factor of production that has been produced for use in the production of other goods and services Economy in which government is the primary owner of capital and natural resources and has broad power to allocate the use of factors of production In producing a good or service the situation that occurs if the opportunity cost of producing that good or service is lower for that economy than for any other The process through which an economy achieves an outward shift in it s production possibilities curve The set of rules that define how an economy s resources are to be owned and how decisions about their use are to be made When an economy is operating on its production possibilities curve A person who operating within the context of a market economy seeks to earn profits by finding new ways to organize factors of production The resources available to the economy for the production of goods and services Includes money and other paper assets such as stocks and bonds that represent claims on future payments Situation in which all the factors of production that are available for use under current market conditions are being utilized The skills a worker has as a result of education training or experience that can be used in production Situation in which the economy is using the same quantities of factors of production but is operating inside its production possibilities curve The human effort that can be applied to the production of goods and services As an economy moves along its production possibilities curve in the direction of producing more of a particular good the opportunity cost of addition units of that good will increase Economy in which resources are generally owned by private individuals who have the power to make decisions about their use Economy that combine elements of market capitalist and of command socialist economic system The resources of nature that can be used for the production if goods and services A graphical representation of the alternative combinations of goods and services an economy can produce A model that shows the goods and services that an economy is capable of producing its opportunities given the factors of production and the technology it has available Situation in which an economy is producing the goods and services in which it has a comparative advantage The knowledge that can be applied to the production of goods and services The value or satisfaction that people derive from the goods and services they consume and the activities they pursue A shift in a demand curve A movement along a demand curve that results from a change in price Change in Supply Change in Quantity Supplied Circular Flow Model Complements Demand Curve Demand Schedule Demand Shifter Equilibrium Price Equilibrium Quantity Factor Markets Inferior Good Law of Demand Markets Model of Demand and Supply Normal Good Product Markets Quantity Supplied Shortage Substitutes Supply Curve Supply Schedule Supply Shifter Surplus Corporate Stock Corporation Dividends Partnership Price Ceilling Price Floor Retained Earnings Sole Proprietorship Stock Market Third Party Payer Base Period Business Cycle Consumer Price Index CPI Cyclical Unemployment Deflation Expansion Frictional Unemployment Hyperinflation Implicit Price Deflator Inflation Labor Force Natural Level of Employment A shift in the supply curve Movement along the supply curve caused by a change in price Model that provides a look at how markets work and how they are related to each other Two goods for which an increase in price of one reduced the demand for the other A graphical representation of a demand schedule A table that shows the quantities of a good or service demanded at different prices during a particular period all other things unchanged A variable that can change the quantity of a good or service demanded of each price The price at which quantity demanded equals quantity supplied The quantity demanded and supplied at the equilibrium price Markets in which households supply factors of production labor capital and natural resources demanded by firms A good for which demand decreases when income increases For virtually all goods and services a higher price leads to a reduction in quantity demanded and a lower price