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| The study of decision making, supply and demand, and how people create and use resources and services. |
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| Large scale/general economic factors. |
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| Small scale/individualistic economic factors. |
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| Stuff you need to survive and stuff that would be nice to have. |
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| "What am I losing by making this decision?" |
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| The next best thing we give up by making a choice. |
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| Stuff that motivates people to do things/buy stuff. |
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| What you give up by to add one more unit to something. |
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| What you gain by adding one more unit to something. |
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| Giving up one thing to gain something else. |
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| Any arrangement that brings buyers and sellers together to do business. |
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| Law of Unintended Consequences |
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| Actions of the people and the gov always have unexpected effects. |
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| Physical things you buy/produce. |
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| Scare resources that go into the production process. |
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| Physical/mental work of humans. |
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| Tools, machines, buildings, ect used in production of goods and services. |
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| Starting and managing a business |
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- Invisible hand
- People only make decisions for their best interest
- "Wealth of Nations"
- Free market with no gov interference |
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| Gov should not interfere with the system of people working for themselves and it will therefore enhance society; "let it be". |
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| Thomas Malthus, David Ricardo, John Stuart Mill |
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- People work in their own self interest so rent will go up and wages will go down as pop grows
- Pop grows exponentially and land resources grow arithmetically
- Pop growth in the 18th century was the cause of low wages and poverty |
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- "Principles of Economics"
- Founder of neoclassical economics
- Important concepts: Supply and demand, ect
- Tried to used mathematics to predict buying habits |
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- His ideas were popular during the Great Depression and led to the rise of America and Great Britain out of it
- Used by Obama
- Lowering interest rates and higher employment will improve society |
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| The amount of satisfication you get from a good/service. |
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| Principle of Diminishing Marginal Utility |
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| The more you produce the less utility you get out of each one (never go into negatives). |
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| Production Possibilities Model |
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On curve: Productive, shows what we can make based on one variable
Outside of curve: Unattainable with current resources
Inside of curve: Underemployment, not working at max efficiency |
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| No matter what you do you have to pay these. |
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| Costs you only pay if you produce something. |
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| Revenue from selling one more unit. |
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| Compares marginal costs and marginal benefits. |
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| Where traditions and customs are more important than money. |
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| Supply and demand direct the production of goods and services. |
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| One without gov regulation (will never really happen). |
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| The gov dictates the levels of production and the prices for goods/services. |
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| An economy that combines both capitalism and socialism. |
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| You seek your own personal gain (working for paycheck). |
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| Prohibiting agreements between companies that restrict free trading and competition. |
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| A market where factors of production are bought and sold. |
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| A market where goods/services are bought and sold. |
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| Household/consumer sector |
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- Sell factors of production for income
- Buy goods/services for their wants/needs |
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- Buys factors of production from households
- Sell goods/services to households for profit |
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- Collects taxes from households/businesses for public goods
- Buys and sells goods/services/factors of production |
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| A payment of money for which there is no goods/services exchanged. |
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| International/trade sector |
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| Exchange involving a good or service between two or more countries. |
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| A market structure where there is a single seller selling a unique product. |
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| The law the U.S. Congress passed to ban trusts, monopolies, and cartels. |
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| A product or service produced by a privately owned company and is usually only available to a few people. |
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| The owner of the private good may exclude others from use unless they pay. |
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| Goods and services open to the public. |
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| Public goods are open to anyone and anyone can use them at anytime. |
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| A market in which the industry is dominated by a few companies. |
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| A illegal secretive agreement between companies intending to disrupt market stability. |
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| A agreement between companies to work in each others favors. |
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