Terms in this set (35)
Think BIG! The study of economics concerned with the economy as a whole such as growth, inflation, and unemployment. When politicians argue about the economy, they usually argue about macroeconomics.
Think small. The study of economics at a smaller scale like how households and businesses use resources. It focuses on how individual economic behavior effects supply and demand goods and services.
The amount of a good or service a consumer is willing to buy at a certain price.
Law of Demand
As the price of a good or service rises or falls, the quantity of the good or service that people are willing and able to buy will also rise or fall.
The amount of a good or service a producer will make available at a given price.
Law of Supply
As the price of a good or service producers are willing and able to offer for sale rises or falls, the quantity of that good or service rises or falls.
Reaching a conclusion after considering alternatives and there results.
People who use their money to start or run a company.
People use goods and services to satisfy their needs and wants. We are all consumers.
The decision we make with when faced with alternatives.
An amount that must be paid to obtain something or sacrifice to obtain something.
Total or whole-The total amount of money earned and/or the total amount of products made and sold.
Produced or made within ones country. If it is made in the U.S.A than it's a domestic good.
A good that is produced.
Gross Domestic Product (GDP)
The total value of all products and services within that territory during a specified period (most commonly, per year). GDP is used to determine the size of the nations economy and is an indicator of the strength of the economy as it can be compared from one year to another.
Trading a good or service for another good or service or for money.
The price of one nations currency compared to another nations currency.
Factors of Production
The things that are required to produce the goods and services that people want and need. The 4 main factors are natural resources, human resources (labor), capital goods, and entrepreneurship.
Those already-produced durable goods that are used in production of goods or services. Example are tools, robots, and computers that are used for producing other products.
A person or people who put the factors of production together.
Spending by all levels of government on goods and services including military, schools, roads, and social programs.
Any reward or benefit, such as money, advantage or good feeling, that motivates people to do something.
The quantity and quality of human effort available to produce goods and services.
The basic kinds of resources used to produce goods and services. Land, natural resources and human resources including labor are examples.
Using available resources in an economic way. It is part of resource management. In project management for example, resource allocation is the scheduling of activities and the resources required by those activities while taking into consideration both the resource availability and the project time.
The condition that exists because human wants exceed the amount of available resources to satisfy those wants. The problem of scarcity faces all individuals and organizations, including firms and government agencies. There simply is not enough resources to satisfy every-body's needs and wants.
The act of manufacturing something.
Activities performed by people, government, or agencies to satisfy economic wants.
Desires that can be satisfied by consuming or using a service or a good. Economists do not differentiate between wants and needs.
Places or technological arrangements (phone, internet) where goods and services can be exchanged.
A situation where a good or service grows in monetary value over time.
A situation where a good or service decreases in monetary value over time.
The rise of prices of goods or services over time or the devaluing of a currency over time.
Translates to, "hands off." This supports the idea that the economy should be run by private citizens (not the government).
The movement of output and income from one sector of the economy to another; often illustrated as a circular flow diagram.