Intro to Econ

“thinking at the margin”

movement at frontier between 2 points

economics

social science that deals with how a society allocated its scarce resources among its unlimited wants and needs

g/s

goes on axis of ppg

OC

most desirable alternative given up as a result of a decision

guns or butter

the odd way to define a society’s trade off

family unit

central to a society in a traditional economy

specialization

the concentration of productive efforts on a limit number of activities

Laissez Faire

the doctrine that states that the gov should generally not intervene in the marketplace

allocate

the process of choosing which needs to be satisfied and how much of our resources will be used to satisfy them

Frontier

the line connecting the normal points on a PPG

land

all natural resources in an economic sense

economic systems

the combination of social and individual decision making a society uses to answer the basic economic questions

household

person or group in the same residence

consumer

those that buy and use goods or services

PPG

a graph showing the alternative ways an individual or society uses its resources

capital

capital

human made/based resources used to produce other g/s

labor intensive

using more than human labor than machines

Gender lines

how labor is divided in a trad economy

product market

exchanges from firm to household

planned obsolescence

when a g becomes outdated or non-functional after a short or dpecified time

want

what we desire

enterprenueurship

the skill in acquiring and managing the fop

human capital

the skills and knowledge gained by a worker through experience

command economy

3 economic questions answered by the gov

revenue

money gained b4 costs

incentive

expectation, good or bad, that encourages a certain behavior

durable

long lasting good

shortage

condition when a g/s is unavaliable at the current price

service

action or activity one person performs for another

labor

effort a person devotes to a task for which they are paid

physical capital

all human made objects used to create other g/s

capital intensive

using more machines than human labor

traditional economy

3 econ qs answered by social customs, habit, and ritual

household

person/group in same residence

factor market

exchange from household to firm

self-interest

one’s personal gain

competition

struggle among firms for household money

good

physical object a person buys and uses

need

those things necessary for survival

scarcity

condition where wants and needs are unlimitied but resources need to produce g/s to meet those wants and needs are limited

self-interest

motivating force in a free market economy

firm

organizations that use resources to prod and sell