ap macro chapter 1 vocab
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Created by:
heather160 on February 3, 2011
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21 terms
Terms | Definitions |
|---|---|
 Scarcity | the fact that there aren't enough resources available to satisfy our needs. |
| Factors of production | land, labor, capital, entrepreneurship |
| land | all natural resources (crude oil, water, air, and minerals) |
| labor | skills and abilities to produce services (quantity and quality of human resources) |
| Capital | final goods produced for use in final production. |
| Entrepreneurship | it's not what resources you have, but how well you use them. |
| Entrepreneurship | seeks for better products and brings together resources needed to produce them |
| Economics | the study of how people use scarce resources |
| Opportunity cos | What is given up to get something else |
| Production Possibilities | Hypothetical choices |
| Law of increasing opportunity cost | we must give up quantities of goods and services to get more of a particular good. |
| Efficiency | max. output of a good from the resources used in production |
| Economic growth | an increase in output (real GDP) an expansion of production possibilities |
| Market Mechanism | the use of market prices and sales to signal desired outputs (or resource allocations) |
| Laissez Faire | "leave it alone" doctrine non-intervention of gov't in the mechanism |
| Mixed Economy | economy that uses both market signals and government directives to allocate goods and resources |
| Market Failure | an imperfection in the market mechanism that prevents optimal outcomes |
| Gov't Failure | when gov't fails to improve the market outcomes or makes them worse. |
| Macroeconomics | the study of aggregate behavior, the economy as a whole how much money in total consumers will spend on goods |
| Microeconomics | study of individual behavior in the economy, components of the larger economy individual businesses, firms, individual businesses make investments |
| ceteris paribus | the assumption of nothing changing |
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