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Definition
| The study of how people use their scarce resources to satisfy their unlimited wants. |
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| The inputs(factors of production) used to produce the goods and services that people want. Resources are: labor, capital, natural resources, and entrepreneurial ability. |
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| The physical and mental effort used to produce goods and services. |
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Definition
| Buildings, equipment, and human skills used to produce goods and services |
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Definition
"Gifts of Nature" used to produce goods and services;
renewable
exhaustible |
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Definition
| Managerial and organizational skills needed to start a firm, combined with the willingness to take the risk of profit loss. |
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Definition
| A profit-seeking decision maker who starts with an idea, organizes an enterprise to bring that idea to life and assumes the risk of the operation. |
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Definition
| Payment to resource owners for their labor |
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Definition
| Payment to resource owners for the use of their capital. |
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Definition
| Payment to resource owners for use of their natural resources. |
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Definition
Reward for entrepreneurial ability
Sales revenue - Resource cost. |
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Definition
A tangible product used to satisfy human wants.
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Term
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Definition
| An activity, or intangible product, used to satisfy human wants. |
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Definition
| Occurs when the amount people desire exceeds the amount available at a zero price. |
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Definition
| A set of arrangements by which buyers and sellers carry out exchange at mutually agreeable terms. |
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Definition
| A market in which a good or service is bought. |
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Term
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Definition
| A market in which a resource is bought and sold. |
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Term
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Definition
| A diagram that traces the flow of resources, products, income, and revenue among economic decision makers. |
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Term
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Definition
| Individuals try to maximize the expected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit. |
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Term
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Definition
| Incremental, additional, or extra; used to describe a change in an economic variable. |
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Term
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Definition
| The study of the economic behavior in particular markets, such as that for computers or unskilled labor. |
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Term
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Definition
| The study of the economic behavior of entire economies. |
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Term
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Definition
| A simplification of reality used to make predictions about cause and effect in the real world. |
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Term
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Definition
| A measure, such as price or quantity, that can take on different values at different times. |
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Term
| other-things-constant assumption |
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Definition
| The assumption, when focusing on the relation among key economic decision makers, what motivates them. |
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Term
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Definition
| An assumption that describes the expected behavior of economic decision makers, what motivates them. |
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Term
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Definition
| A theory about how key variables relate. |
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Term
| positive economic statement |
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Definition
| A statement that can be proved or disproved by reference to facts. |
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Term
| normative economic statement |
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Definition
| A statement that reflects an opinion, which cannot be proved or disproved by reference to facts. |
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Term
| association-is-causation fallacy |
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Definition
| The incorrect idea that if two variable are associated in time, one must necessarily cause the other. |
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Term
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Definition
| The incorrect belief that what is true for the individual, or part, must necessarily be true for the group, or the whole. |
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Definition
| unintended consequences of economic actions that may develop slowly over time as people react to events. |
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Term
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Definition
| on a graph depicting two-demensional space, the zero point |
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