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Definition
The study of the management of scarce resources to satisfy unlimited human wants. |
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Five factors of production |
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Definition
Capital-Plant, Equip, Inventory, Residential Const. (PEIR) Land-Natural resources Labour-Human resources Technology-Change in the productive process Entrepreneurship-innovation, invention |
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Term
Difference between goods and services |
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Definition
Good-tangible commodity Service-intangible commodity |
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Term
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Definition
Resources used to produce goods and services |
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Definition
Act of making goods and services |
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Definition
The act of using goods or services to satisfy wants |
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Definition
Implication that choices must be made, which implies cost |
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Role of economics vs. politics |
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Definition
Economics manages scarce factors, politics decides among desires |
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Definition
Value of next-best alternative, subjective |
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Production possibility curve (PPC) |
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Definition
Shows all possible combinations of production if all inputs are fully emplyed at normal utilization rate |
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Definition
Allocation of economy's scarce resources among alternative uses |
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Term
Four key economic pronelms |
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Definition
What is produced and how? micro What is consumed and by whom? micro Why are resources sometimes idle? macro Is productive capacity growing? macro |
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Definition
Study of causes and consequences of the allocation of resources as it is affected by the workings of the price system. |
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Definition
Study of the determination of economic aggregates such as total output, price level, employment, and growth |
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Law of increasing marginal opportunity cost |
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Definition
THe OC of increases as the production of X increases. |
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Term
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Definition
Opportunity cost of producing one more unit |
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Term
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Definition
Extra benefit from consuming one more unity |
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Term
Where should we be on the PPC? |
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Definition
Where marginal cost=marginal benefit |
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Term
"Four thespians in the economic tragedy |
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Definition
Household (Consumer) Firm (Producer) Government Rest of World |
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Term
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Definition
Area over which buyers and sellers negotiate the exchange of a commodity |
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Definition
One worker producing one product |
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Definition
One product divided into individual tasks done by different workers |
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Term
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Definition
Goods and services being directly traded |
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Term
Four types of economic systems |
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Definition
1) Traditional-allocation and distribution based on custom, effective in static environment 2) Command-Central planning authority 3) Free market-Allocation and distribution by private households and firms. Decentralized price system 4) Mixed-Allocation and distribution by private and public sectors |
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Term
Four types of economic systems |
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Definition
1) Traditional-allocation and distribution based on custom, effective in static environment 2) Command-Central planning authority 3) Free market-Allocation and distribution by private households and firms. Decentralized price system 4) Mixed-Allocation and distribution by private and public sectors |
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Term
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Definition
Stresses efficiency and allocation of resources |
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Term
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Definition
Stressed equity and distribution of income |
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