Module 1-4 Vocab

Question 1

Economics

Answer 1

The study of scarcity and choice

Question 2

Individual Choice

Answer 2

decisions by individuals about what to do

Question 3

Economy

Answer 3

system for coordinating a society’s productive and consumptive actvities

Question 4

Market Economy

Answer 4

decisions on what to produce is made by producers and consumers. Not government

Question 5

Command Economy

Answer 5

Industry is publicly owned and central government makes decisions on what is produced

Question 6

Incentives

Answer 6

Rewards or punishments that motivate particular choices

Question 7

Property rights

Answer 7

Grant individuals the right to trade goods and services with each other

Question 8

Marginal analysis

Answer 8

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

Question 9

Resource

Answer 9

Anything that can be used to produce something else

Question 10

Land

Answer 10

Resources that come from nature

Question 11

 Labor

Answer 11

Effect of workers

Question 12

 Capital

Answer 12

Manufactured goods used to make other goods and services

Question 13

Entrepreneurship

Answer 13

Effort of entrepreneurs in organizing resources, taking risks, and innovation

Question 14

Scarce resource

Answer 14

Not enough of the resources to satisfy demand

Question 15

Opportunity cost

Answer 15

What is given up in order to receive an item

Question 16

 microeconomics

Answer 16

Study of how individuals make decisions

Question 17

Macroeconomics

Answer 17

Study of overall ups and downs of the economy

Question 18

Economic Aggregates

Answer 18

Measures that summarize data across different markets

Question 19

Positive economics

Answer 19

The way the economy actually works

Question 20

Normative economics

Answer 20

How the economy should work

Question 21

Business cycle

Answer 21

Alteration between recession and expansions

Question 22

 depression

Answer 22

 Long period of economic downturn

Question 23

Recession

Answer 23

Period of economic downturn

Question 24

 expansion

Answer 24

Period of economic up turn

Question 25

 employment

Answer 25

Number of people who are working

Question 26

 unemployment

Answer 26

Number of people who are looking for work but are not employed

Question 27

Labor force

Answer 27

 sum of employment and unemployment

Question 28

Unemployment rate

Answer 28

Percentage of the labor force unemployed 

Question 29

Aggregate output

Answer 29

Total production of goods and services

Question 30

Inflation

Answer 30

Overall rising price level

Question 31

 deflation

Answer 31

Overall falling price level

Question 32

Price stability

Answer 32

Overall price level doesn’t change

Question 33

Economic growth

Answer 33

 increase in maximum amount of goods and services in economy produce

Question 34

Model

Answer 34

Simplified representation used to understand a real life situation

Question 35

Other things equal assumption

Answer 35

Only one factor changed

Question 36

Trade off

Answer 36

Giving up something to gain something

Question 37

Efficient economy

Answer 37

No way to make anyone better off without making at least one person worse off

Question 38

Productive efficiency

Answer 38

Produces at a point on the PPC

Question 39

Allocative efficiency

Answer 39

Produces on a point of the piece of PC that makes consumers as well off as possible

Question 40

 Technology

Answer 40

Technical means for producing goods and services

Question 41

Gains from trade

Answer 41

 getting more of something than what they could produce themselves

Question 42

Compared advantage

Answer 42

Producing a gooder service at an opportunity cause lower than others

Question 43

Absolute advantage

Answer 43

Being able to produce the most of a good in the least amount of time

Question 44

Terms of trade

Answer 44

The rate at which one good can be exchanged for others