Macro Unit 1

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

the particular mix of goods a society produces represents the combination that society most desires

manufactured goods used to make other goods and services

"all other things being equal;" acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same

a business's ability to produce a particular good or service at a lower opportunity cost than its competitors

any tangible commodity produced and subsequently purchased to satisfy the current wants and perceived needs of the buyer

(factors of production) everything that a business makes use of in order to produce goods and services for its customers; includes land, labor, capital, and entrepreneurship

states that as you increase production of one good, the opportunity cost to produce an additional good will increase

the branch of economics that is concerned with overall ups and downs in the economy

the study of the costs and benefits of doing a little bit more of an activity versus a little bit less

an economy in which the decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions

the branch of economics that studies how individuals, households, and firms make decisions and how those decisions interact

the branch of economic analysis that makes prescriptions about the way the economy should work; focuses on the value of economic fairness

the branch of economic analysis that describes the way the economy actually works

the real cost of an item: what you must give up in order to get it

illustrates the trade-offs facing an economy that produces only two goods; shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced

in short supply; when a resource is not available in sufficient quantities to satisfy all the various ways a society wants to use it

when you give up something in order to have something else

any resource used to produce another good or service (consumed while making the final product)

the price at which the market is in equilibrium, that is, the quantity of a good or service demanded equals the quantity of that good or service supplied; also referred to as the market-clearing price

when the quantity supplied of a good or service exceeds the quantity demanded; occurs when the price is above its equilibrium level and is also known as excess supply

when the quantity of a good or service demanded exceeds the quantity supplied; occurs when the price is below its equilibrium level and is also known as excess demand

economic measures that summarize data across many different markets

people can get more of what they want through trade than they could if they tried to be self-sufficient

each person specializes in the task that he or she is good at performing

the maximum price sellers are allowed to charge for a good or service; a form of price control

the quantity of a good or service bought and sold at the equilibrium (or market-clearing) price

industry is publicly owned and a central authority makes production and consumption decisions

the maximum amount of money a consumer is willing to pay for an additional good or service (not in book)

the change in total production cost that comes from making or producing one additional unit (not in book)

minimum price buyers are required to pay for a good (not in book)

the maximum output of a product given scarce resources (not in book)