Untitled Flashcards Set

Market Economy- Free market, resources are owned privately by individuals or businesses

Command economy- Planned economy, the government  and not markets provide the answer to the basic economic questions.

Mixed economy- government intervention is often employed to address the “failure of markets” or to achieve other objectives that a society deems important.

Production possibilities curve (PPC) - production possibilities curve, PPC shows all the combinations of the maximum of two goods that can be produced by an economy… given its resources and technology and making full use of its resources and maximizing efficiency.

Leakage- Economic leakage occurs when money generated in an economy is spent on goods, services, or investments outside that economy, reducing the local circulation of funds.Saving, taxes, imports

Injections- Economic injection refers to the introduction of new money into an economy, typically from outside sources, which boosts economic activity, government spending, exports

Positive economics - attempts to explain and predict economic events 

Normative economics - Deals with how things should or ought to be, which means it relies on differing opinion beliefs or values of individuals and groups.

Competition- Rivalry between actors/participants to achieve an objective, exists when buys and sellers act independently 

Total utility- Total utility is the total satisfaction that consumers get from a good or service

diminishing marginal utility -The law of diminishing marginal utility states that your additional satisfaction (utility) of consuming additional units of a good or service declines (diminishes) with each additional unit consumed 

Individual supply - is the amount that a single firm is willing and able to supply ( at various price levels, in a certain period of time)

Market supply- is the total amount that all firms are willing and able to supply (at various prie levels, in a certain period of time). It is the sum of all the various individual suppliers of that good or service

Short Run In microeconomics- The short run in microeconomics is the time period during which at least one of the outputs is fixed (unchanging in quantity and quality)

Long Run in Microeconomics - The long run in microeconomics is the time period which none of the outputs are fixed

Total Product- is the total quantity of output produced by a firm 

Marginal product- is the additional output produced by one additional unit of a variable unit

Competitive Supply: Goods in competitive supply are different products a firm could make with its resources- The goods compete for the use of the same resources, producing more of one means that producing less of the other.

Joint supply: Basically the idea that one product is produced alongside the other. For example, if the supply of cows goes down so will the supply of leather.