Vocab Flashcards

1
Q

Microeconomics

A

Focuses on individual decision-making units and how they interact

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2
Q

Macroeconomics

A

explores the economy as a whole

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3
Q

Scarcity

A

The fixed amount of goods or services available

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4
Q

Traditional economy

A

An economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rule and manner of their distribution also referred to as a subsistence economy, a traditional economy is defined by bartering and trading.

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5
Q

Compound economy

A

An economic system in which the means of production are publicly owned and economic activity is directed by a central government

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6
Q

Market economy

A

an economic system in which the forces of supply and demand determine what goods and services are produced

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7
Q

Mixed economy

A

an economy which practiced characteristics of both command and market economies; supply and demand largely influence the economy, but there is government intervention to meet certain economic goals

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8
Q

Opportunity cost

A

the cost of choosing; what you give up by choosing one option

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9
Q

Goods

A

objects that can fulfill human wants/needs, provide utility

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10
Q

Services

A

economic activity that is intangible; provides utility, but cannot be stored

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11
Q

Endowment

A

natural and human resources from which all goods and services must be produced

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12
Q

Utility

A

satisfaction; economists assume maximizing this drives individual choice; measured in utils

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13
Q

Profit motive

A

the tendency of people to engage in activities that will lead to monetary gain

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14
Q

Consumer sovereignty

A

the economic power of the individual in a free market

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15
Q

Government regulation

A

requirements the government places on private firms and individuals to achieve the government’s goals

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16
Q

Marginal utility

A

additional increment of utility associated with consuming one more unit of a good or service

17
Q

Margin

A

in a succession of units, the specific unit you are focusing on

18
Q

Total utility

A

the total satisfaction derived from consuming a specific quantity of a good or service; the total of marginal utilities for all individual units consumed

19
Q

Satiate

A

satisfy

20
Q

Initial decision

A

over-simplified decision-making process based on utility (consume until marginal utility =0)

21
Q

Bliss point

A

maximization of utility

22
Q

Marginal analysis

A

evaluating the impact of one additional unit

23
Q

Util

A

a measure of utility (this is an abstract concept)

24
Q

Diminishing marginal productivity

A

initially, one input increases the initial successive units of input toward the output, but eventually this will add to less output

25
Q

Balancing at the margin

A

maximizing utility in light of scarcity

26
Q

Discounting the future

A

utility diminishes the further in the future that utility is realized