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| A situation in which unlimited wants exceed the limited resources available to fulfill those wants. |
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| The study of the choices people make to attain their goals, given their resources. |
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| A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade. |
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| The idea that because of scarcity, producing more of one good or service means producing less of another good or service. |
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| The highest valued alternative that must be given up to engage in an activity. |
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| analysis concerned with what is |
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| Analysis concerned with what ought to be. |
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| The study of how households and firms make choices. |
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| The study of the economy as a whole. |
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| The practical application of a new product or new process. |
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| The development of a new product or new process. |
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| The process used to produce a new product or new process. |
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| Activities done for others. |
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| The total ammount recieved for selling a good or service. |
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| labor, capital, and natural resources. |
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| Financial money or physical things used in the company. |
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| The accumulated training and skills that workers possess. |
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Definition
| The ability of the economy to increase the production of goods and services. |
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Definition
| The ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources. |
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Definition
| The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors. |
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Definition
| A market for labor, capital, natural resources, and entrepreneurial ability. |
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| A market with few government restrictions on how a good or service can be produced or sold or on how a factor of production can be employed. |
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Definition
| A curve that shows the relationship between the price of a product and the quantity of the product demanded. |
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Term
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Definition
| Holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase. |
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Definition
| The change in the quantity demanded of a good that results from a change in price. |
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Term
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Definition
| The change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers purchasing power. |
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Definition
| A good for which the demand increases as income rises and decreases as income falls. |
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Definition
| A good for which the demand increases as income falls and decreases as income rises. |
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| Goods and services that can be used for the same purpose. |
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| Goods and services that are used together. |
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| A curve that shows the relationship between the price of a product and the quantity of the product supplied. |
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| The rule that, holding everything else constant, increases in price cause increase in quantity supplied, and decreases in price cause decreases in the quantity supplied. |
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Definition
| A situation in which quantity demanded equals quantity supplied. |
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Definition
| A situation in which the quantity supplied is greater than the quantity demanded. |
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Definition
| A situation in which the quantity demanded is greater than the quantity supplied. |
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Definition
| A legally determined maximum price that sellers may charge. |
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| A legally determined minimum price that sellers may receive. |
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Definition
| A benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service. |
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Definition
| The difference between the highest price a consumer is willing to pay for a good or service and the price the consumer actually pays. |
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Definition
| The additional benefit to a consumer from consuming one more unit of a good or service. |
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Definition
| The additional cost to a firm of producing one more unit of a good or service. |
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| The difference between the lowest price a firm would be willing to accept for a good or service and the price it actually receives. |
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| The reduction in economic surplus resulting from a market not being in competitive equilibrium. |
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| A market in which buying and selling take place at prices that violate government price regulations. |
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| The cost borne by the producer of a good or service. |
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| The total cost of producing a good or service, including both the private benefit and any external benefit. |
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| The benefit received by the consumer of a good or service. |
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Definition
| The total benefit from consuming a good or service, including both the private benefits and any external benefits. |
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Definition
| A situation in which the market fails to produce the efficient level of output. |
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Term
| Pigovian taxes and subsidies |
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Definition
| Government taxes and subsidies intended to bring about an efficient level to output in the presence of externalities. |
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Term
| Command-and-control approach |
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Definition
| An approach that involves the government imposing quantitive limits on the amount of pollution firms are allowed to emit or requiring firms to install specific pollution control devices. |
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