Introduction to Agricultural Economics - Unit 1

Flashcards covering key vocabulary terms from the 'Introduction to Agricultural Economics' lecture, Unit 1.

Economics

The branch of science concerned with the production, consumption, and transfer of wealth; the study of human choices in a world of scarcity.

Microeconomics

The study of individual and business decisions regarding the allocation of resources and prices of goods and services.

Macroeconomics

The study of the decisions of countries and governments, analyzing entire industries and economies rather than individuals or specific companies.

Scarce

In limited supply; a resource is scarce when there is not enough of it available to satisfy all the various ways a society wants to use it.

Opportunity cost

What you must give up in order to get something; the value of your next best alternative.

Trade-off

Comparison of the costs and benefits of doing something.

Marginal decision

A decision made at the margin of an activity about whether to do a bit more or a bit less of that activity.

Marginal analysis

The study of marginal decisions.

Incentive

Anything that offers rewards to people who change their behavior; something that induces a person to act.

Equilibrium

An economic situation in which no individual would be better off doing something different.

Specialization

The situation in which each person specializes in the task that he or she is good at performing.

Efficient economy

An economy that takes all opportunities to make some people better off without making other people worse off.

Rational people

Individuals who systematically and purposefully do the best they can to achieve their objectives, given available opportunities, and make decisions by evaluating costs and benefits of marginal changes.