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Chapter 1 Key Terms
Terms in this set (24)
a viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions
The limits on amounts and types of goods. Fundamental constraint that creates opportunity costs
The value of the resources that must be used to produce a unit of product.
Marginal Benefit and Marginal Cost
The benefit of producing an additional unit, and the cost of producing an additional unit. "If I study for another hour, how much will I benefit?"
Decision making with consideration for the cost and benefit of a certain action (for example, studying another hour). Is something worth the cost?
A widely accepted generalization (about economic related behavior of individuals or institutions
other things equal assumption
In a specific scenario or observation of two economic factors, that all other factors (besides the two being observed) are constant
The more "detail-oriented" side of economics. Looks at concepts on a small scale, like within a household, town, firm, or industry. For example, the cause/effects of a company laying off 15 workers, or the effect of a $0.20 price hike on a french fry order.
The "big-picture" side of economics. Looks at health and behavior of the economy as a whole (both nationally and globally)
One of the 4 main limited resources of economics. Refers to items produced to make more products. Like technology, robots, a tool, assembly line, factory
One of the 4 main limited resources of economics. Things that we acquire from the environment, like wood, pigs, metals, etc.
One of the 4 main limited resources of economics. Any mental or physical exertion from a human being that is used in the provision/production of a good or service. Factory workers, internship, electrician, cashier, etc.
Entrepreneurial ability (talent)
One of the 4 main limited resources of economics. Combines land, labor, and capital. Essentially the ability to combine these things to make products or provide services. Provided by entrepreneurs (business people) (Bob Hall?)
The collection of economic units, treated as one unit. Can be applied to both Micro and Macro. Example for Micro, overall unit sales of a product by a retail store. Example for Macro, GDP
Analysis of solid facts and data, very pragmatic
Analysis and creation of theories and judgement. For example, what our economy should look like (market, communism, etc), what price a good should be set at, how a store should advertise something, etc. THEORIES
The different combinations of two different products/services a consumer can purchase based on how much they can spend.
Factors of Production
The 4 main limited resources of economics.
Production Possibilities Curve
The different combinations of two different goods/services that can be produced (Assuming full-production, full-employment, and factors of production are fixed.
People who set strategy and implement ideas on how to operate an entity. The risk-bearers
Products and services that satisfy human wants directly.
Products and services that facilitate production of Consumer Goods
Law of Increasing Opportunity Cost
As the production of a good increases, the opportunity cost (cost of a unit) of an additional good rises.
The reduction in the limits of a Production Possibilities Curve (the increase of its max output). This is also reflected in GDP.
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