10247065
| Question | Answer |
| a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade | market |
| the study of the choices of consumer, business managers, and government officials to attain their goals given their scarce resources | economics |
| situation in which unlimited wants exceed the limited resources available to fulfill those wants; we must make choices because of this. | scarcity |
| the idea that, because of scarcity, producing more of one good or service means producing less of another good or service | trade-off |
| highest valued alternative that must be given up to engage in an activity | opportunity cost |
| when the government decides how economic resources will be allocated (ex: North Korea, Soviet Union) | centrally planned government |
| decisions of households and firms interacting in markets allocate economic resources | market economy |
| when economic decisions result from both interaction of buyers and sellers in the market and government plays a role in the allocation of the resources | mixed economy |
| the ability of an economy to produce increasing quantities of goods and services | economic growth |
| occurs when a good or service is produced at the lowest possible cost | product efficiency |
| occurs when production is in accordance with consumer preferences | allocative efficiency |
| occurs in markets when both buyer and seller of a product are made better off by the transaction | voluntary exchange |
| goods and services bought domestically but produced in other countries | imports |
| the fair distribution of economic benefits | equity |
| simplified version of reality used to analyze real-world economic situations | economic model |
| analysis concerned with "what is" | positive analysis |
| analysis concerned with "what should be" | normative analysis |
| study of how households and firms make choices, how they interact in markets and how the government attempts to influence their choices | microeconomics |
| study of economy as a whole including topics such as inflation, unemployment, and economic growth | macroeconomics |
| organization that produces a good or service | firm, company, or business |
| someone who operates a business; decides "what" and "how" | entrepreuner |
| practical application of an inventions; significant improvement in a good or in the means of producing a good | innovation |
| processes it uses to produce goods and services | technology |
| tangible merchandise (ex: books/computers) | goods |
| activities done for others (ex: haircuts) | services |
| total amount a firm receives for selling a good or service | revenue |
| the difference between a firm's revenue and its costs | profit |
| all persons occupying a house | household |
| used by firms to produce goods and services | factors of production, economic resources, or inputs |
| financial: stocks and bonds physical: computers, machine tools | capital |
| accumulated training and skills that workers posses | human capital |
| something measurable that can have different values (ex: income) | economic variable |
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