Microeconomics

The ability of an entity to produce more of a good or service than another entity using the same amount of resources.

Absolute Advantage

the amount being made by producers

supply

the amount being asked for by consumers

demand

In Economics, the fact that there are not enough resources to fulfill all human needs and desires

Scarcity

A limit to the amount of a good that can be imported or exported

Trade Cap

bring (goods or services) into a country from abroad for sale.

import

A good or service produced in the home country and sold in another country.

export

as the price of a good increases, the less quantity(Amount) of the good will be demanded ex. Consumers hurt by the higher opportunity costs

Law of Demand

A period of time from the early 15th Century until the early 17th Century in which European ships traveled around the world in search of new trading routes

Age of Exploration

the individual people who make up the labor force of an organization

Human Resources

The ability of an entity to produce a good or service at a lower opportunity cost than another entity.

Comparative Advantage

when obstacles prevent new companies from entering the market

Barrier To Entry

as the price of a good increases, a greater quantity of the good will be supplied Ex. Producers benefit from the increased price

Law of Supply

An outbreak of the Bubonic Plague. A deadly epidemic that struck Europe in the mid-1300's and killed millions.

Black Plague / Black Death

Government payments to an industry to reduce costs or create false demand ex. Farm industry

Subsidies

systematic approach used to evaluate the potential benefits and costs of a proposed project, investment, or decision, aiming to determine whether the benefits outweigh the costs and justify the undertaking

Cost-Benefit Analysis

The economic idea that a country needs to amass wealth through more exporting than importing and measures wealth by the amount of gold that a nation possesses.

Mercantilism

The design and function of the economy as a whole

Macroeconomics

Movement in an economy of good, services, and money from consumers to producers and back again

Circular Flow

Most notable explorer who found alternate trade routes to India through investing in larger and better ships

Prince Henry The Navigator

An economic system characterized by private, rather than government, ownership of industry. Prices, production, and distribution of goods are determined by competition in a free market.

Capitalism

when a person, business, or country focuses on producing one type of good or service that they can make most efficiently. Ex. Samsung only making phones because they do it best

Specialization of Labor

companies will strive for a greater share of the market by producing higher quality and more cheaply priced goods

Competition (Economics)

the exchange of products for money between entities

Trade

the theory that the economy is not led by an entity, but is the result of individuals acting in their own self-interests

Invisible Hand

A maximum price set by the government allowed to be charged for a particular good

Price Controls

the breaking down of a production process into different tasks, with each worker assigned a specific task to increase efficiency.

Division of Labor

assets used in the production of a good which are found in the natural environment

Natural Resources

obstacles to trade ex. government regulations

Trade Barriers

the ability for one country to trade with another without hindrance so that all goods can be produced with the greatest efficiency

Free Trade

a tax placed on a specific type of imported or exported good

Tariff

Any asset that is not valued for itself but because it allows you to produce something else

Capital Resources

The father of capitalism. Wrote "An Inquiry into the Nature and Causes of the Wealth of Nations." Argued that an invisible hand guides the economy to its greatest productivity.

Adam Smith

The study of individuals and their decisions

Microeconomics

One of the first joint-stock companies

Dutch East India Company

The cost of the next best opportunity a person gives up when they make an economic choice

Opportunity Cost

all economies require each other to function

Interdependence of Economies

Adam Smith's theory that the government should not interfere in the economy; translates to "let the people do as they choose."

Laissez-Faire

A company whose stock is owned jointly by shareholders.

Joint-Stock Company

The price at which quantity supplied equals quantity demanded.

Equilibrium Price (Market-Clearing Price)

When demand exceeds supply at a given price.

Shortage

When supply exceeds demand at a given price.

Surplus

A measure of how much quantity demanded or supplied changes with a price change.

Elasticity

Demand that doesn’t change much with price (e.g., gasoline).

Inelastic Demand

A market with only one seller dominating the supply of a product or service.

Monopoly

Government-imposed maximum price (e.g., rent control).

Price Ceiling

Government-imposed minimum price (e.g., minimum wage).

Price Floor

Goods intended for final use by individuals.

Consumer Goods

Tools, equipment, and buildings used to produce other goods and services.

Capital Goods

any physical object or service that is useful or desirable and can be exchanged for money or resources

Goods and Services

resources used to produce other goods and services

Capital