Ch 1 - What is Economics?

Actual economic growth

: any movement which indicates that more output is being produced.

Opportunity cost

: whenever a choice is made by an economic agent concerning the use of its resources, something is given up or sacrificed.

Actual economic growth

: any movement which indicates that more output is being produced.

Opportunity cost

: whenever a choice is made by an economic agent concerning the use of its resources, something is given up or sacrificed.

Sustainability

: ability to be maintained at a certain rate or level.

Imports

: household and firm sectors spend money on forgein goods and services.

Labour

: includes all the human resources used in producing goods.

Microeconomics

: the choices consumers and producers make in response to the changes in the dynamic world.

Economic good

: is one that is scarce and whose use involves an opportunity cost.

Macroeconomics

: focuses on the factors affecting the economy as a whole, such as economic growth and the way well being is being maintained by economic growth,

Productive efficiency

: when the economy is using all of its resources to the fullest extent possible.

Leakage

: any income that leaves the firm sector.

GNI

Gross national income (): amount of money in circular flow.

Production possibilities

curve (PPC): Is a curve that represents all possible combinations of goods /services in a country using the available resources.

concave PPC

A(n) indicates increasing opportunity costs.

Entrepreneurship

(management): organising and risk taking factor of production.

Taxes

: some income from firms and households goes to the government sector in the form of taxes.

Economics

the study of the choices that people make in overcoming the problems that arise because resources are limited, while needs and wants are unlimited

Planned Economy

decisions as to what to produce, how to produce, and for whom, are made by the government

Free market economy

all production is in private hands and demand and supply are left free to set wages and prices in the economy