AP Econ Monster Vocab
PPC - An economic model that measures production efficiency based on available resources.
Opportunity Costs - The potential lost profit from a missed opportunity - the results of choosing one over another
Factors of Production - the resources people use to produce goods and services
Terms of Trade - A measure of a country's export prices relative to its import prices
Law of Demand - the price of an item and the quantity demanded have an inverse relationship
Change in Quantity Demanded - A change in the specific quantity of a product that buyers are willing and able to buy
Change in Demand - A shift in consumer desire to purchase a particular good/service, regardless of price variations
Capital Goods - physical assets/resources that are used in the production of goods/services
Consumer Goods - any goods purchased for consumption and not later used to produce other consumer goods
Comparative Advantage - someone's ability to produce a particular good/service at a lower opportunity cost
Determinants of Demand - income, prices of related goods and services, tastes and preferences, and expectations
Complementary Goods - a good whose use is related to the use of an associated good
Substitute Goods - a product or service that consumers see as essentially the same or similar
Demand Schedule - a table that shows the quantity demanded of a good at different price levels
Equilibrium Price - the market price where the quantity of goods supplied is equal to the quantity of goods demanded
Equilibrium Quantity - when there is no shortage or surplus of a product in the market
Surplus - an amount of a resource that exceeds the portion that is utilized Shortage - the condition in which the quantity of a good demanded is more than the quantity supplied
Price ceiling - the highest price at which a good/service can be sold
Price floor - the lowest legal price that can be paid for goods/services, labor or capital
Law of supply - as the price of a good increases, the quantity supplied also increases
Determinants of Supply - Administrative supply, price speculations, technology intervention, price of other related items, price of factors of production, price of the product/services,
Change in Quantity Supplied - a movement along the supply curve which is only caused by a change in price
GDP - The total monetary value of all the finished goods/services produced within a country’s borders in a specific time period
Expenditure Approach to measuring GDP - Total current year spending on final domestic goods and services
Income Approach to measuring GDP - Total current year factor income = Total National Income
Consumption - the use of goods and services by households
Investment - the production of goods that will be used to produce other goods
Rent - the income derived from the ownership of land and other free gifts of nature
Wages - payment made by an employer to an employee for work done in a specific period of time
Interest - the price you pay to borrow money or the return earned on savings and investments
Profits - the financial benefit realized when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question.
Circular flow of economic activity - the endless cycle of how money and capital flow through an economy
Working age population - number of people ages 16+
Civilian Labor Force - number of people classified as either employed or unemployed (excluding military and institutionalized)
Employed - people who have worked at least one hour in the last 2 weeks (includes full and part time employment)
Unemployed - people not classified as employed but available for work and have submitted a job application in the last 4 weeks
Marginally Attached Worker - people available for work within the last 12 months not classified as employed or unemployed
Discouraged Worker - people previously classified as unemployed who exited the civilian labor force without finding employment
Labor Force Participation Rate - the percentage of the civilian noninstitutional population 16+ that is working or actively seeking work; (Civilian Labor Force / Working Age Population) 100
Actual Unemployment Rate - the percentage of the labor force that is unemployed; (Number of people classified as unemployed / civilian labor force) 100
Frictional Unemployment - associated with voluntary job search and entry into the civilian labor force
Structural Unemployment - associated with either a skill or geographic mismatch between individuals and available jobs
Cyclical Unemployment - associated with joblessness caused by economic recession = Actual unemployment rate - NRU
Natural Rate of Unemployment * - Frictional rate of unemployment + structural rate of unemployment, or the absence of unemployment. NRU occurs at full employment output.
The Minsky Moment - a sudden market collapse after a prolonged period of speculative investment