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23 Cards in this Set
- Front
- Back
Scarcity
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when there is not enough of a resource to meet all of everyone's wants
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Microeconomics
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studies the choices of individual units including house holds, business firms, and government agencies
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Macroeconomics
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studies large-scale economic phenomena, particularly inflation, unemployment, and economic growth
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economics
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social science that seeks to understand the choices people make in using scarce resources to meet their wants
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factors of production
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Basic inputs of labor, capital, and natural resources used in producing all goods and services
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labor
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contribution to production made by people working with their minds and muscles
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capital
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all mans of production that are created by people including tools, industrial equipment, and structures
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natural resources
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anything that can be used as a productive input in its natural state, such as farmland, building sites, forests, and mineral deposits
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opportunity cost
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the cost of a good or service measured in terms of the forgone opportunity to pursue the best possible alternative activity with the same time or resources
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economic efficiency
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a state of affairs in which it is impossible to make any change that satisfies one person's wants more fully without causing some other person's wants to be satisfied less fully.
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efficiency in production
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a situation in which it is not possible given available knowledge and productive resources, to produce more of one good without forgoing the opportunity to produce some of another good
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investment
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the act of increasing the economy' stock of capital that is its supply of means of production made by people
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entrepreneurship
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the process of looking for new possibilities making use of new ways of doing things, being alert to new opportunities, and overcoming old limits
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comparative advantage
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the ability to produce a good or service at a relatively lower opportunity cost than someone else
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positive economics
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concerned with facts and the relationships among them
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normative economics
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devoted to judgement about whether economic policies are good or bad
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efficiency in distribution
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a situation in which it is not possible by redistributing existing supplies of goods, to statisfy one person' wants more fully without causing some other person's wants to be satisfied less fully
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hierarchy
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a way of achieving coordination in which individuals actions are guided by instructions from a central authority
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spontaneous order
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a way of achieving coordination in which individuals adjust their actions in response to cues from their immediate environment
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market
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any arrangement people have for trading with one another
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theory
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a representation of the way in which facts are related to one another
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model
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a synonym for theory; in economics, often applied to theories that are stated in graphical or mathematical form
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production possibilities frontier
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a graph that shows possible combinations of goods that can be produced by an economy given available knowledge and factors of production
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