AP Microeconomics unit 1 vocab

Economics

The social science in dealing with the use of scarce resources to obtain maximum satisfaction of society's virtually economic wants.

Opportunity cost

The amount of other products that must be forgone or sacrificed to produce one unit of a product

Ceteris Parabus

see other things as equal

Macro economics

large scale economics

Micro economics

small scale economics like buying a pizza

economic resources

The land, labor, capital, and entrepreneur ability that are used in the production of goods and services productive agents; factors of production.

Factors of Production

Economic resources- labor, capital, labor, and entrepreneurial ability

Investment

spending for the production and accumulation of capital and additions

Full employment

The use of all available resources to produce want-satisfying goods and services.

Full Production

employment of available resources so that the maximum amount of goods and services is produced

Utility

The want satisfying of a good power or service; that satisfaction or pleasure from a good.

Marginal analysis

The comparison of marginal benefits and marginal costs usually for decision.

allegative Effiency

a state of the economy in which production represents consumer preferences

Productive Efficiency

the production of a good in the least costly way

Consumer Goods

products and services that satisfy human wants directly.

Capital Goods

human made resources used to produce goods and service; goods that do not satisfy direct needs

PPC

product production curve

laissez-faire capitalism

abstention by governments from interfering in the workings of the free market.

command economy

an economy in which production, investment, prices, and incomes are determined centrally by a government.

Traditional economy

an original economic system in which traditions, customs, and beliefs help shape the goods and the services the economy produces, as well as the rules and manner of their distribution.

resource market

A market in which households sell and firms buy

product market

A market in which the products are sold by firms and bought by households.

increasing opportunity cost

is the concept that as you continue to increase production of one good, the opportunity cost of producing that next unit increases.

constant opportunity cost

which measures the opportunity cost, is constant all along the PPF. Thus, any PPF that is a straight-line segment has constant opportunity costs

circular flow model

The circular flow of income is a neoclassical economic model depicting how money flows through the economy. In the most simple version, the economy is modeled as consisting only of households and firms

Economic Growth

an outward shift in the production possibilities curve that results from an increase in resource supplies or quality

Scarcity

the limited amount of a resource there is

Comparative Advantage

a lower relative or comparative cost than that of another

Absolute advantage

the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group.

specialization

The use of resources of an individual, a firm or a region, or a nation to concentrate production on one or a small number of goods and services

marginal benefits

The extra benefit of consuming 1 more unit of some good or service the change in total benefit when 1 more unit is consumed.