Introduction to Microeconomics

A series of vocabulary flashcards covering key concepts from microeconomics, including definitions and important terms related to the study of economics.

Economics

The study of how individuals and societies choose to use scarce resources to satisfy their seemingly unlimited wants.

Microeconomics

The branch of economics that focuses on the choices made by individual participants in the economy, such as consumers and firms.

Macroeconomics

The branch of economics that studies the overall performance of the economy, including national income, aggregate production, and inflation.

Opportunity Cost

The value of the next best alternative that must be forgone when making a choice.

Scarcity

A situation where the available resources are insufficient to satisfy everyone's desires for them.

Positive Economics

Objective statements that can be tested and validated through evidence; focuses on what is.

Normative Economics

Subjective statements that involve opinions or value judgments about what ought to be; focuses on what should be.

Circular Flow Diagram

A visual representation of how money and goods move through the economy between households, firms, and government.

Factors of Production

The resources used to produce goods and services, including land, labor, capital, and entrepreneurship.

GDP (Gross Domestic Product)

The total value of all final goods and services produced within a country in a given period.

Labor Market

The supply and demand for labor, where employers seek workers and workers seek jobs.

Government Failure

Situations where government intervention fails to allocate resources efficiently, leading to a negative outcome.

Demand and Supply

The relationship between the quantity of a commodity that consumers are willing to buy and the quantity that producers are willing to sell.

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient.

Economic Growth

An increase in the production of goods and services in an economy over a period of time.

Consumer Behavior

The study of how individuals make decisions to spend their available resources.