the study of the behavior of individual consumers, firms, and industries and the determination of market prices and quantities of good, services, and the factors of production.
the study of aggregate economic activity. It investigates how the economy as a whole works.
all other things being held equal.
matters if economics that can be proven to be right or wrong by looking at the facts.
matters of economics that are based upon opinion and so are incapable of being proved to be right or wrong.
the limited availability of economic resources relative to society's unlimited demand for goods and services.
the physical factor of production. it consists of natural resources, some of which are renewable and some of which are non-renewable.
the human factor of production. it is the physical and mental contribution of the existing work force to production.
the factor of production that comes from investment in physical capital and human capital.
the stock of manufactured resources.
the value of the workforce
the factor of production involving organising and risk-taking.
it is the next best alternative forgone when an economic decision is made.
goods or services which are unlimited in supply and have no opportunity cost are free goods. a free food has an unlimited supply ad market price zero.
a good or services which is relatively scarce and so has a price. an opportunity cost is involved if it is consumed.
the satisfaction of pleasure that an individual derives from the consumption of a good or service.
production possible curve
it shows the maximum combinations of goods or services that can be produced by an economy in a given time period, if all the resources in the economy are being used fully and efficiently and the state of technology is fixed.
the actual production of goods and services in an economy in a given time period.
this occurs when previously unemployed factors of production are brought in to use. it is represented by a movement from a point within a PPC to a new point nearer to the PPC.
the possible production that would be possible in an economy if all available factors were being employed.
this occurs when the quantity and/or quality of factors of production within an economy is increased. it is represented by an outward shift of the PPC.
the growth of real output in an economy over time. usually measured as growth in real GDP.
it is a broad concept involving improvement i standards of living, reduction in poverty, improved health and education.
development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
free market economy
an economy where the means of production are privately held by individuals and firms, demand and supply determine how much to produce, how/how many to produce, and for whom to produce.
an economy where the means of production are collectively owned. the state determines how much to produce, how/how many to produce, and for whom to produce.
an economy in the process of moving from a centrally planned economic system towards a more market-oriented economic system.