front 1 scarce | back 1 the quantity available isn't large enough to satisfy all productive uses ex: gas and lumber |
front 2 individual choice | back 2 the decision of what to do, which necessarily involves a decision of what not to do |
front 3 tradeoff | back 3 you give up one thing to obtain something in return |
front 4 opportunity cost | back 4 what you must give up in order to get it |
front 5 services | back 5 activities produced in an economy |
front 6 an economy | back 6 a system for coordinating the production and distribution of goods and services |
front 7 3 main coordination problems | back 7 1. what, and how much to produce 2. how to produce it 3. for whom to produce it |
front 8 production possibility curve | back 8 illustrates the trade-offs facing an economy that produced 2 goods - efficiency - shows the max quantity of one good that can be produced for any given production of the other |
front 9 efficiency | back 9 combating the concept of scarcity |
front 10 economic growth | back 10 allows a sustained rise in aggregate output |
front 11 capital goods | back 11 human made products used by a business to produce consumer or other capital goods |
front 12 consumer goods | back 12 products used by consumers directly |
front 13 economist resources | back 13 land, labor, capital, entrepreneurship |
front 14 land | back 14 anything drawn from nature for use in the production of goods and services ex: water, clay |
front 15 labor | back 15 the time and effort people contribute to the production process |
front 16 capital | back 16 anything long lasting that is created by humans for use in the production of other things |
front 17 entrepreneurship | back 17 the willingness of people to organize, operate, and assume the risks involved with business ventures |
front 18 Adam Smith | back 18 began the study of economics, wrote the first textbook "wealth of nations" |
front 19 invisible hand | back 19 society being guided by own self-interest |
front 20 trade | back 20 key to much better standard of living; the reason we have an economy is that there are gains from trade |
front 21 specialization | back 21 a particular area which someone or an economy concentrates on or is an expert in -everyone has a role or interest |
front 22 absolute advantage | back 22 the ability of an actor to produce more of a good or service than a competitor |
front 23 comparative advantage | back 23 the ability of an actor to produce a good or service for a lower opportunity cost than a competitior |
front 24 comparative advantage | back 24 the basis for trade - trade can be beneficial to both even if one has an absolute advantage in the production of both goods |
front 25 self-interest | back 25 the best motivation for society |
front 26 macroeconomics | back 26 a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole |
front 27 2 macroeconomic gauges | back 27 1. GDP 2. Unemployment 3. Inflation |
front 28 GDP | back 28 gross domestic product - everything produced in the economy |
front 29 unemployment | back 29 the total number of people who are actively looking for work but aren't currently employed |
front 30 inflation | back 30 measurement of wealth/money - an increase in prices and fall in purchasing value of money |
front 31 freshwater | back 31 conservative, supply side - FDR funds colleges for economic research on freshwater coasts |
front 32 saltwater | back 32 liberal demand side - more salt more funding/supply - FDR funds colleges for economic research |
front 33 business cycle | back 33 the short-run alternation between economic downturns and economic upturns |
front 34 depression | back 34 a very deep and prolonged downturn |
front 35 recessions | back 35 periods of economic turndowns when output and employment are falling |
front 36 expansions | back 36 sometimes called recoveries, are periods of economic upturns when output and employment are rising |
front 37 business-cycle peak | back 37 the point at which the economy turns from expansion to recession |
front 38 business-cycle through | back 38 the point at which the economy turns from recession to expansion |
front 39 economic growth | back 39 an increase in the maximum possible output of an economy |
front 40 model | back 40 is a simplified representation of a real situation that is used to better understand real-life situations |
front 41 "other things equal" | back 41 all other relevant factors remain unchanged |
front 42 employment | back 42 the total number of people currently working for pay |
front 43 labor force | back 43 the sum of employment and unemployment |
front 44 unemployment rate | back 44 the annual percentage of the labor force that is unemployed |
front 45 inflation rate | back 45 the annual percent change in the aggregate price level |
front 46 aggregate output | back 46 the economy's total production of goods and services for a given time period |