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NOTE: these are not all the things we have to know for Econ, but they are the words that I needed to study a lot :) but I got tired after chapter eight. So if anyone wants to add the rest of the terms, it would be wonderful! Happy Homework :D

Scarcity

the fact that limited amounts of goods and services are available to meet unlimited wants

Economics

the study of how people seek to satisfy their needs and wants by making choices (in a world of scarcity)

Shortage

When consumers want more of a good or service than producers are willing to make abailable at a particular price.

Entrepreneurs

People who decide how to combine resources to create new goods and services

Incentive

a positive motivational influence

Disincentive

a negative motivational influence

Marginal (thinking at the margin)

The process of deciding whether to do or use one additional unit of some resource

Microeconomics

the study of economic behavior and decision making in small units, such as households and firm

Macroeconomics

the study of economic behavior and decisions in a nation's whole economy

Free Market Economy

an economic system in which decisions on the three key economic uestions are based on voluntary exchange in markets

Mixed Economy

a market-based economic system in which the government is involved to some extent

Traditional Economy

an economic system that rellies on habit, custom, or ritual to decide the three key economics questions

Centrally Planned Economy

An economic system in which the government makes all decision on the three key economic questions

Pillars of Free Enterprise

private property, specialization, voluntary exchange, the price system, market competition, entrepreneurship

Demand

The desire to own something and the ability to pay for it

Law of Demand

Consumers will buy more of a good when its price is lower and less when its price is higher

Change in Quantity Demanded

movement along the demand curve

Change in demand

Shift of the demand curve

Market Demand

the demand by all the consumers of a given good or service

Individual Demand

how many 1 items person will buy at different prices.

Future Price Expectation, Income, Population, Price of other goods (substitutes and compliments), taste and preferences

What are the factors that shift the demand curve? (answer is in alphabetical order)

Elastic

Describes demand that is very sensitive to a change in price

Inelastic

Describes demand that is not very sensitive to a change in price

Supply

The amount of goods available

Law of supply

Producers offer more of a good as its price increases and less as its price falls

Changes in Quantity Supplied

movement along the supply curve

Changes in Supply

A shift in the supply curve

Cost of inputs, government, number of suppliers, price expectations, and technology

What are the factors that shift the supply curve? (answer is in alphabetical order)

Total Revenue

the total amount of money a firm receives by selling goods or services

Profit

the total revenue minus the total cost

Economics of scale

factors that cause a producers average cost per unit to fall as output rises

Market

Any arrangement that allows buyers and sellers to exchange things

Market Clearing Price/ equalibrium

the price at which the amount supplied is equal to the amount demanded

Productivity of Labor

the quantity of output produced by a unit of labor

Productivity

the ratio of the quantity and quality of units produced to the labor per unit of time

GDP

the total market value of all final goods and services produced annually in an economy

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