Unit 1 Econ Vocab Terms

Specialization

________: Using the resources of an individual, firm, region or nation to produce one or a few goods or services rather than the entire range of goods and services.

Macroeconomics

________: examines the performance and behavior of the economy as a whole.

Labor

________: physical actions and mental activities that people contribute to the production of goods and services.

Investment

________: spending that pays for the production and accumulation of goods and services.

Barter

________: Directly trading good for good.

Microeconomics

________: the part of economics concerned with decision making by individual customers, workers, households, and business firms.

Utility

________: the pleasure, happiness, or satisfaction obtained from consuming a good or service.

opportunity costs

Law of increasing ________: as the production of a particular good increases, the ________ of producing an additional unit rises.

Aggregate

________: a collection of specific economic units treated as if they were one unit.

old technologies

Creative destruction: New technology destroys markets for ________.

Laissez faire capitalism

________: Government intervention is at a minimum and markets and prices direct all economic activity.

Entrepreneurial ability

________ and entrepreneurs: takes the initiative in combining the resources of land, labor and capital to produce a good or a service.

Command systems

________: Government has total control over all economic activity.

Economic resources

________: all natural, human, and manufactured resources that go into the production of goods and services.

Positive economics

________: focuses on facts and cause- and- effect relationships.

equal assumption

Other- things- ________: the assumption that factors other than those being considered do not change.

Customer sovereignty

________: Customers spend their income on the goods they are most willing and able to buy.

Scarcity

________: restricts options and demands choices.

Economic principle

________: a statement about economic behavior or the economy that enables prediction of the probable effects of certain actions.

Consumer goods

________: products that satisfy our wants directly.

Marginal analysis

________: comparisons of marginal benefits and marginal costs, usually for decision making.

Opportunity cost

________ is a sacrifice.

Opportunity costs

________: to obtain more of one thing, society forgoes the opportunity of getting the next best thing.

Economics

the social science concerned with how individuals, institutions, and societies maximize their satisfaction for needs and wants under conditions of scarcity

Scarcity

restricts options and demands choices

Opportunity costs

to obtain more of one thing, society forgoes the opportunity of getting the next best thing

Utility

the pleasure, happiness, or satisfaction obtained from consuming a good or service

Marginal analysis

comparisons of marginal benefits and marginal costs, usually for decision making

Economic principle

a statement about economic behavior or the economy that enables prediction of the probable effects of certain actions

Other-things-equal assumption

the assumption that factors other than those being considered do not change

Microeconomics

the part of economics concerned with decision making by individual customers, workers, households, and business firms

Macroeconomics

examines the performance and behavior of the economy as a whole

Aggregate

a collection of specific economic units treated as if they were one unit

Positive economics

focuses on facts and cause-and-effect relationships

Normative economics

incorporates value judgements about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal

Economizing problem

the need to make choices because economic wants exceed economic means

Budget line

A schedule or curve that shows various combinations of two products a consumer can purchase with a specific money income

Economic resources

all natural, human, and manufactured resources that go into the production of goods and services

Land

all natural resources used in the production process

Labor

physical actions and mental activities that people contribute to the production of goods and services

Capital

Capital goods includes all manufactured aids used in producing consumer goods and services

Investment

spending that pays for the production and accumulation of goods and services

Entrepreneurial ability and entrepreneurs

takes the initiative in combining the resources of land, labor and capital to produce a good or a service

Consumer goods

products that satisfy our wants directly

Production possibilities curve

the different combinations of goods and services that society can produce in a fully employed economy, assuming a fixed availability of supplies of resources and fixed technology

Law of increasing opportunity costs

as the production of a particular good increases, the opportunity cost of producing an additional unit rises

Economic growth

growth of economic capacity, which means a larger total output

Economic system

A particular set of institutional arrangements and a coordinating mechanism to respond to the economizing problem

Laissez-faire capitalism

Government intervention is at a minimum and markets and prices direct all economic activity

Command systems

Government has total control over all economic activity

Market

An institution or mechanism that brings buyers and sellers into contact

Freedom of enterprise

Entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services and sell them in their chosen markets

Freedom of choice

Owners can employ or dispose of their property and money as they see fit

Specialization

Using the resources of an individual, firm, region or nation to produce one or a few goods or services rather than the entire range of goods and services

Barter

Directly trading good for good

Customer sovereignty

Customers spend their income on the goods they are most willing and able to buy

Creative destruction

New technology destroys markets for old technologies