Mod 1 - The Study of Economics

Economy

a system for coordinating a society's productive and consumptive activities.

economics

the study of scarcity and choice

individual choice

decisions by individuals about what to do, which necessarily involve decisions about what not to do

economy

a system for coordinating a society's productive and consumptive activities

market economy

an economy in which the decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions

command economy

an economy in which industry is publicly owned and a central authority makes production and consumption decisions

incentives

rewards or punishments that motivate particular choices

property rights

establish ownership and grant individuals the right to trade goods and services with each other

marginal analysis

the study of the costs and benefits of doing alittle bit more of an activity versus a little bit less

resource

anything that can be used to produce something else

land

all resources that come from nature, such as minerals, timber, and petroleum

labor

the effort of workers

capital

manufactured goods used to make other goods and services; also called "physical capital."

entrepreneurship

the efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes

scarce

in short supply; when a resource is not available in sufficient quantities to satisfy all the various ways a society wants to use it

microeconomics

the branch of economics that studies how individuals, households, and firms make decisions and how those decisions interact

macroeconomics

the branch of economics that is concerned with the overall ups and downs of the economy

economic aggregates

economic measures that summarize data across many different markets

positive economics

the branch of economic analysis that describes the way the economy actually works

normative economics

the branch of economic analysis that makes prescriptions about the way the economy should work

economics

the study of scarcity and choice.

individual choice

decisions by individuals about what to do, which necessarily involve decisions about what not to do.

market economy

an economy in which the decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions.

command economy

an economy in which industry is publicly owned and a central authority makes production and consumption decisions.

incentives

rewards or punishments that motivate particular choices.

property rights

establish ownership and grant individuals the right to trade goods and services with each other.

marginal analysis

the study of the costs and benefits of doing alittle bit more of an activity versus a little bit less.

resource

anything that can be used to produce something else.

land

all resources that come from nature, such as minerals, timber, and petroleum.

labor

the effort of workers.

capital

manufactured goods used to make other goods and services; also called "physical capital."

entrepreneurship

the efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes.

scarce

in short supply; when a resource is not available in sufficient quantities to satisfy all the various ways a society wants to use it.

opportunity cost

the real cost of an item: the value of the next best alternative that you must give up in order to get that item.

microeconomics

the branch of economics that studies how individuals, households, and firms make decisions and how those decisions interact.

macroeconomics

the branch of economics that is concerned with the overall ups and downs of the economy.

economic aggregates

economic measures that summarize data across many different markets.

positive economics

the branch of economic analysis that describes the way the economy actually works.

normative economics

the branch of economic analysis that makes prescriptions about the way the economy should work.