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Chapter 1 & 2 Microeconomics
Hubbard and O'Brien Microeconomics, chapters 1 & 2
Terms in this set (31)
The situation in which unlimited wants exceed the limited resources available to fulfill those wants.
the study of the choices people make to attain their goals, given scarce resources
a simplified version of reality used to analyze real-world economic situations
a group of buyers and sellers of a good or service and the instition or arrangement by which they come together to trade.
analysis that involves comparing marginal benefits and marginal costs.
the idea that because of scarcity, producing more of one service or good means producing less of another good or service.
the highest valued alternative that must be given up to engage in an activity.
centrally planned economy
an economy in which the government decides how economic resources will be allocated
an economy in which the decisions of households and firms interacting in markets allocate economic resources.
an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.
the situation in which a good or service is produced at the lowest possible cost.
a state of the economy in which production is in accordance with consumer preferences; in particular, every good or service is produced up to the point where the last unit provides marginal benefit to society equal to the marginal cost of producing it.
the situation that occurs in markets when both the buyer and seller of a product are made better off by the transaction.
the fair distribution of economic benefits
something measurable that can have different values, such as the wages of software programmers.
analysis concerned with what is
analysis concerned with what ought be.
the study of how households and firms make choices, how the interact in markets, and how the government attempts to influence their choices.
the study of the economy as a whole, including topics such as inflation, unemployment and economic growth.
production possibilities frontier (ppf)
a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology.
the ability of an economy to produce increasing quantities of goods and services.
the act of buying or selling
the ability of an individual, a firm, or country to produce more of a good or service than competitiors, using the same amount of resources.
the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.
markets for goods- such as computers- and services- such as medical treatment.
markets for the factors of production, such as labor, capital, natural resources, and entrepreneurial ability.
factors of production
the inputs used to makegoods and services
a model that illustrates how participants in markets are linked.
a market with few government restrictions on how a good or service can be produced or sold, or on how a factor of production can be employed.
someone who operates a business, bringing together the factor of production-labor, capital, and natural resources-to produce goods and services.
the rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it
Recommended textbook explanations
Principles of Microeconomics
N. Gregory Mankiw
Principles of Economics
David Shapiro, Steven Greenlaw
ePack: Principles of Microeconomics, 7th + MindLink for Aplia Instant Access
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Economics (The Pearsons Series in Economics)
Anthony P. O'Brien, R. Glenn Hubbard
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