the branch of economics that studies how people make decisions and how those decisions interact
New cards
2
macroeconomics
the branch of economics that is concerned with the overall ups and downs in the economy
New cards
3
demand schedule
a list or table showing how much of a good or service consumers will want to buy at different prices
New cards
4
law of demand
the principle that a higher price for a good or service, other things equal, leads people to demand a smaller quantity of that good or service
New cards
5
law of supply
other things being equal, the price and quantity supplied of a good are positively related
New cards
6
scarce, scarcity
in short supply; when there is not enough of the resource available to satisfy all the various ways a society wants to use it
New cards
7
land
all resources that come from nature, such as minerals, timber, and petroleum
New cards
8
labor
the effort of workers
New cards
9
capital
manufactured goods used to make goods and services
New cards
10
resource
anything that can be used to produce something else; includes natural and human types
New cards
11
entrepreneurship
the efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes
New cards
12
marginal analysis
the study of marginal decisions
New cards
13
positive economics
the branch of economic analysis that describes the way the economy actually works
New cards
14
normative economics
the branch of economic analysis that makes prescriptions about the way the economy should work
New cards
15
production possibilities curve
illustrates the trade-offs facing an economy that produces only two goods; shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced
New cards
16
trade-off
when you give something up in order to have something else
New cards
17
gains from trade
an economic principle that states the by dividing tasks and trading, people can get more of what they want through trade than they could if they tried to be self-sufficient
New cards
18
absolute advantage
the advantage conferred by the ability to produce more of a good or service with a given amount of time and resources
New cards
19
comparative advantage
the advantage conferred if the opportunity cost of producing the good or service is lower for another producer
New cards
20
quantity demanded
the actual amount of a good or service consumers are willing to buy at some specific price
New cards
21
quantity supplied
the actual amount of a good or service producers are willing to sell at some specific price
New cards
22
change in demand
a shift of the demand curve, which changed the quantity demanded at any given price
New cards
23
substitutes
pairs of goods for which a rise in the price of one of the goods leads to an increase in the demand for the other good
New cards
24
complements
pairs of goods for which a rise in the price of one good leads to a decrease in the demand for the other good
New cards
25
normal good
a good for which a rise in income increases the demand for that good
New cards
26
price floor
the minimum price buyers are required to pay for a god or service; a form of price control
New cards
27
price ceiling
the maximum price sellers are allowed to charge for a good or service; a form of price control
New cards
28
input
a good or service used to produce another good or service
New cards
29
surplus
the excess of a good or service that occurs when the quantity supplied exceeds the quantity demanded; occurs when the price is above the price equilibrium
New cards
30
shortage
the insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied; occurs when the price is below the equilibrium price
Studied by 50 people
Note 
Flashcard (33)