less than optimal not at the best possible level suboptimal economic analysis visual models mathematical models empirical models and Combination of goods is at the point where the budget line is tangent to an the want satisfying power of a good or service the satisfaction or pleasure a Spend less reduce one s expenses Looks at the economy as a whole or a big picture Study of how society and individuals manage their scarce resources Focus on individual people or individual businesses or a Assignment 1 Keegan Wendling Define the following words Economics Microeconomics close up picture Explains how people or individuals behave Macroeconomics View Concentrates on factors such as unemployment inflation interest rates etc Economizing Models simulation models Optimal indifference curve Suboptimal decisions choices performance suboptimal conditions Utility consumer obtains from the consumption of a good or service Equilibrium seeking each other out and where no changes are occurring Partial equilibrium only a part of the market Scarcity scarce to fulfill those wants Efficiency individual Opportunity Costs activity Incentive Disincentive Goods Services buyer Markets suppliers of a particular good or service Self interested behavior personal benefits Products and services that satisfy human wants directly Negative motivation Positive motivation Economic state in which every resource is optimally allocated to serve each A condition of economic equilibrium which takes into consideration The highest valued alternative that must be given up to engage in an refers to individual actions and behaviors that provoke positive A transaction in which no physical goods are transferred from the seller to the A state of balance or a stable situation where opposing forces cancel A situation in which unlimited wants exceed the limited resources available Any institution or mechanism that brings together buyers demanders and sellers The requirement that when analyzing the relationship between A decision making process that is based on making choices that result in the A schedule or curve that shows the various amounts of a product that consumers a schedule or curve showing the various amounts of a product that producers are Opinions feelings not testable statements Descriptive Fact based statements testable statements The additional cost of producing one more unit of a good or service graph of the relationship between the price of a good and the quantity Ceteris Paribus assumption two variable such as price and quantity demanded other variables are held constant Positive Statements Normative Statements Marginal costs Rational firm optimal level of benefit Supply willing able to provide for sale at various prices at a given time Supply curve supplied Demand are willing and able to purchase at each of a series of possible prices during a specified period of time Demand curve demanded Budget constraint Movement along a curve demanded changes in accordance to the original demand relationship Shift of a curve it changes the amount purchased at every price point Equilibrium where the hypothetical supply and demand curves intersect Elasticity economic variable Surplus Shortage to an Upward Pressure on price Price ceiling Price floor As the price at which supply equals demand for a product in other words graph of the relationship between the price of a good and the quantity Represents all the combinations of goods and services A legal maximum on price tends to create shortages A legal minimum on price tend to create surpluses Occurs when Qs Q d leads to a downward Pressure on price Occurs when Quantity Demand Qd is greater than Quantity supply Qs Leads A measure of how much one economic variable responds to changes in another Will occur when the price of the good changes and the quantity