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econ 1

Terms in this set (48)

utility
Measure of satisfaction from consumption of commodities
consumer goods
commodity produced or consumed by consumer to satisfy wants or needs
capital
money for investment of business
factors of production
land, labor, capital
market
structure that allows buyers and sellers to exchange a good or service
land
all natural resources used to produce goods and services
labor
Human effort directed toward producing goods and services
opportunity cost
the most desirable alternative given up as the result of a decision
profit
The financial gain made in a transaction
revenue
income
ppc
production possibility curve
production possibilities curve
used to show tradeoffs between of 2 items
Commodities
economic good or service exchangeable with other goods
income
money individuals/businesses received in exchange for providing a good or service
Production
the creation of goods and services
value
benefit provided by a good or service
shoratge
demand for a product or service exceeds in a market (sells out)
Price expectations
expectations that sellers have concerning the future price of a good
ceiling
keeps from rising, set below a price
floor
keeps from falling, set above a price
equilibrium
the price that balances quantity supplied and quantity demanded
resources
all things used in producing goods and services
subsidize
supported/ payed for
inferior good
goods whose demand decreases when consumer income increases
normal good
goods whose demand increases when consumer income increases
simultaneously
at the same time
Disequilibrium
describes any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market
surplus
A situation in which quantity supplied is greater than quantity demanded (excess production)
quantity demanded
the amount of a good that buyers are willing and able to purchase (all prices)
quantity supplied
the amount of a good that sellers are willing and able to sell
economic growth
the ability of the economy to increase the production of goods and services
Efficiency
the property of society getting the most it can from its resources
inefficiency
That which does not accomplish an intended purpose.
demand
Consumer willingness and ability to buy products
inverse relationship
a negative relationship between two variables (movement in opposite directions)
direct relationship
a positive relationship between two variables (line)
maximize utility
greatest value for the lowest price
maximize profits
lead to the highest profits
Cetris Paribus
helps isolate multiple independent variables affecting a dependent variable
mixed economy
an economic system combining private and public enterprise.
private sector
Businesses not associated with government agencies.
public sector
the part of an economy that is controlled by the government.
Capitalism
An economic system based on private ownership of capital
unlimited wants
There is no end to the number of things people want and need
Scarcity
Limited quantities of resources to meet unlimited wants
increase in supply demand
shift in the entire curve (shift right)
increase in quantity demanded
movement along an existing supply curve
command economy
An economic system in which the government makes all economic decisions.
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