View
- Term
- Definition
- Both Sides
Study
- All (54)
Shortcut Show
Next
Prev
Flip
ECON 203: EXAM 1
Scarcity |
The limited nature of society's resources
|
economics |
the study of how society manages its scarce resources
|
efficiency |
the property of society getting te most it can from its scarce resources
|
Equality |
the property of distributing economic properity uniformly among the members of society
|
Opportunity Cost |
whatever must be given up to obtain some item
|
rational people |
people who systematically and purposfully do the best they can to achieve their objectives
|
marginal changes |
small incremental adjustments to a plan
|
incentives |
something that induces a person to act
|
property rights |
the ability of an individual to own and exercise control over scarce resources
|
market failure |
a situation in which a market left on its own fails to allocate resources efficiently
|
externality |
the impact of one person's actions on the well-being of a bystander
|
Market Power |
the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices
|
productivity |
the quantity of goods and services produced from each unit of labor input
|
inflation |
an increase in the overall level of prices in the economy
|
business cycle |
flunctuations in economic activity, such as employment and production
|
Circular-Flow diagram |
a visual model of the economy that shows how dollars flow through markets among households and firms
|
production possibilities frontier |
a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the availiable production technology
|
Microeconomics |
the study of how households and firms make decisions and how they interact in markets
|
Macroeconomics |
the study of economy-wide, phenonmena, including inflation, unemployment, and economics growth
|
Positive statement |
claims that attempt to describe the world as it is
|
Normative Statement |
Claims that attempt to prescribe how the world should be
|
Absolute Advantage |
the ability to produce a good using fewer inputs than another producer
|
Opportunity Cost |
whatever must be given up to obtain something else
|
Comparative Advantage |
the ability to produce a good at a lower opportunity cost than another producer
|
Imports |
goods produced abroad and sold domestically
|
Exports |
Goods produced domestically and sold abroad
|
market |
a group of buyers and sellers of a particular good or service
|
Competitive market |
a market in which there are many buyers and many sellers so that each has a negligible impact on the market price
|
Quantity Demanded |
the amount of a good that buyers are willing and able to purchase
|
law of demand |
the claim that, other things equal, the quantity demanded of a good falls when the price of a good rises
|
demand schedule |
a table that shows the relationship between the price of a good and the quantity demanded
|
demand curve |
a graph of the relationship between the price of a good and the quantity demanded
|
normal good |
a good for which, other things equal, an increase in income leads to an increase in demand
|
inferior good |
a good for which, other things equal, an increase in income leads to a decrease in demand
|
substitutes |
two goods for which an increase in the price of one leads to an increase in the demand for the other
|
Complements |
two goods for which an increase in the price of one leads to the decrease in the demand for the other
|
Quantity Supplied |
the amount of a good that sellers are willing and able to sell
|
Law of supply |
the claim that, other things equal, the quantity supplied of a good rises when the price of the good rises
|
supply schedule |
a table that shows the relationship between the price of a good and the quantity supplied
|
Supply Curve |
a graph of the relationship between the price of a good and the quantity supplied
|
equilibrium |
a situation in which the market price has reached the level at which quantity supplied equals quantity demanded
|
Equilibrium Price |
the price that balances quantity supplied and quantity demanded
|
Equilibrium Quantity |
the quantity supplied and the quantity demanded at the equilibrium price
|
Surplus |
a situation in which quantity supplied is greater than quantity demanded
|
Shortage |
a situation in which quantity demanded is greater than quantity supplied
|
Law of Supply and Demanded |
the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.
|
Gross Domestic Product |
the market value of all final goods and services produced within a country in a given period of time
|
Consumption |
spending by households on goods and services, with the exception of purchases of new housing
|
Investment |
spending on capital equipment, inventories, and structures, including household purchases of new housing
|
government purchases |
spending on goods and services by local, state, and federal governments
|
Net Exports |
spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)
|
Nominal GDP |
the production of goods and services valued at current prices
|
Real GDP |
the production of goods and services valued at constant prices
|
GDP Deflator |
a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100
|