Term
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Definition
| not pursuing one thing oin order to pursue another |
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Term
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| opportunities to make oneself better off |
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Term
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| cannot make some better off without making some worse off |
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Term
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Definition
| the social arrangements that determine what is produced, how it is produced, and for whom is is produced |
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Term
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Definition
| an institution that brings together buys are sellers of good or services |
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Term
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Definition
| an economy in which most economic decisions ar emade by buys and sellers, who may be individuals or firms |
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Term
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Definition
| an economy in which government etiehr makes or strongly influences how most economic decisions aremade |
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Term
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Definition
| the way in which the work required to produce a good or service is divided into tasks performed by different workers |
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Term
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Definition
| when workers or firms focus on particular tasks in the overall producation process for which they are well-suited |
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Term
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Definition
| when the average cost of producing each individual unit declines as total output increases. (marginal average cost declines as total amount produced increases) |
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Term
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Definition
| the tren in which buying and selling in markets have increasingly crossed national borders |
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Term
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Definition
| services that are produced domestically and sold in another country |
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Term
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Definition
| goods and services produced abroad and then sold domestically |
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Term
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Definition
| a diagram that views the economy as consisting of households and firms interact in a good and services market, a labor market, and a financial capital market |
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Term
| goods and services market |
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Definition
| a market in which firms are sellers of what they produce and households are buyers |
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Term
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Definition
| the market in which households sell their labor as workers to business firms or other employers |
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Term
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Definition
| the market in which those who save money provide financial capital and recieve a rate of return from those who wish to raise money and pay a rate of return |
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Term
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Definition
| the payment from those who have recieved financial capital to those who provided it |
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Term
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Definition
| the amount of an original financial investment before any rate of return is paid |
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Term
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Definition
| a payment calculated as a percentage of the original amount saved or borred and paid by the borrower to the saver |
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Term
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Definition
| economic policies that affect bank lending and interest rates |
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Term
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Definition
| economic policies that involve government spending and taxes |
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Term
| the division of labor allows individuals and firms to specialize and to produce more for several reasons... |
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Definition
a)it allows the agents to focus on areas of advantage due to natural factors and skill levels
b)it encourages that agents to learn and invent
c)it allows agents to take advantage of economies of scale |
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Term
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Definition
| risk remium (risk of not being repaid) + inflation + time value of money |
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Term
| equation of compound interest |
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Definition
| (amount at present)(1+interest rate)^number of years=amount at future |
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