ECON 202

Resource

An input, such as land, labor, or capital, that can be used to produce an economic good

Scarcity

The fundamental concept of economics that indicates there is less of a good freely available than people would like.

Marginal

A term used to describe the effects of a change in the situation.

Opportunity Cost

The highest valued alternative that must be sacrificed as the result of a decision that is made.

Microeconomics

The branch of economics that focuses on how human behavior affects the conduct of affairs within narrowly defined units.

Marcoeconomics

The branch of economics that focuses on how human behavior affects outcomes in highly aggregated markets.

Transaction costs

The time, effort or expense needed to search out, negotiate, and consummate an exchange.

Property Rights

The rights to use, control or obtain benefits from a resource or good.

Capitalism

An economic system based on private ownership of productive resources and the allocation of goods based upon market prices.

Socialism

A system of economic organization in which the basic means of production rest with the state, and resource allocation is determined by centralized planning.

Substitutes

Related products that serve similar purposes such that an increase in the price of one will cause an increase in the demand for the other.

Complements

Related products that are jointly consumed such that an increase in the price of one will cause a decrease in the demand for the other.

Short Run

A time period of insufficient length to permit decision makers to adjust fully to a change in market conditions.

Long Run

A time period of sufficient length to enable decision makers to adjust fully to a change in the market.

Equilibrium

A state of balance between conflicting forces, such as supply and demand.

Shortage

A condition that exists when the quantity demanded is greater than the quantity supplied.

Surplus

A condition that exists when the quantity supplied is greater than the quantity demanded.

Demographics

The statistical study of people groups within human populations.

Gross Domestic Product

The total market value of all final goods and services produced domestically during a specific period, usually a year.

Intermediate Goods

Goods purchased for resale, or used by firms to produce another good or service.

Depreciation

The estimated amount of physical capital that is worn out or used up producing goods during a time period.

Export

Goods and services produced domestically but sold to foreigners.

Imports

Goods and services produced by foreigners but purchased by domestic consumers, investors, and governments.

Consumer Price Index

An indicator of the general level of prices that attempts to determine changes in the cost of purchasing a market basket of goods bought by a typical consumer during a specific period.