when a producer can provide a good or service in **greater** quantity for the **same** cost, or the **same** quantity at a **lower** cost, than its competitors
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capital (goods)
physical assets a company uses to produce goods and services for consumers
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ceteris paribus (other things equal)
a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same
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command economy
a type of economy in which governments own the factors of production such as land, capital, and resources, and officials determine when, where, and how much is produced
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comparative advantage
an economy's ability to produce a particular good or service at a lower opportunity cost than its trading partners
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deflation
the general decline of the price level of goods and services
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depression
a severe and prolonged downturn in economic activity; may be defined as an extreme recession lasting three+ years
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economics
the study of scarcity and its implications for the use of resources, production of goods and services, growth of production and welfare over time
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economy
the process or system by which goods and services are produced, sold, and bought in a country or region
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efficient
achieving maximum productivity with minimum wasted effort or expense
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entrepreneur
a person who organizes and operates a business or businesses, takes on greater than normal financial risks, conceives of the original idea, and makes decisions
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incentive
generally, a motivator or form of encouragement; a payment or concession to stimulate greater output or investment
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inflation
an economy-wide, sustained trend of increasing prices
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labor
a force of production that refers to the work people do to produce goods and services, including all physical and mental efforts that go into production
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labor force
the number of people who are either working or actively looking for work; all people capable of employment
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land
a factor of production, similar to labor, as one of the crucial elements in creating goods and services; specifically a resource of raw materials
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marginal analysis
an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity
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macroeconomics
the part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity
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market economy
a type of economy utilizing private ownership as the means of production and voluntary exchanges/contracts; prices are set by supply and demand
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microeconomics
\ the part of economics concerned with single factors and the effects of individual decisions
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model
a simplified description of reality, designed to yield hypotheses about economic behavior that can be tested
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normative economics
a perspective on economics that reflects normative, or ideological, judgments toward economic development, investment projects, statements, and scenarios; what the economy ‘should’ be
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opportunity cost
\ the loss of potential gain from other alternatives when one alternative is chosen
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output
quantity (or quality) of goods or services produced in a given time period, by an entity
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positive economics
objective descriptions of economic phenomena; based on fact
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production possibilities curve
measures the maximum output of two goods using a fixed amount of input
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property rights
theoretical and legal ownership of resources, both tangible and otherwise, and how they can be used
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resource
anything used to make something else, limited and desired to some degree
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scarcity
the concept that all goods are to some degree limited, therefore scarce, requiring choices about how they are allocated
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specialization
a method of production whereby an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency
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terms of trade
the ratio between a country's export prices and its import prices, used as an indicator of a country’s economic health
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trade-off
the option we give up when making a choice between two opportunities
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unemployment
a state of actively looking for or being capable of work, but not currently being employed
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Flashcard (48)