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economics
the study of the allocation of our limited resources to satisfy
our unlimited wants
TERM 2
resources
DEFINITION 2
inputs used to produce goods and services
TERM 3
scarcity
DEFINITION 3
exists when human wants exceed human needs
TERM 4
theory
DEFINITION 4
is an established explanation that accounts for known facts
or phenomena
TERM 5
hypothesis
DEFINITION 5
a testable proposition
micro-economics
the study of household and firm behavior and how they
interact in the market place
TERM 7
macro-economics
DEFINITION 7
the study of the whole economy including topics of inflation
unemployment and economics
TERM 8
fallicy of
composition
DEFINITION 8
the incorrect view that what is true for the individual is
always true for the group
TERM 9
positive analysis
DEFINITION 9
an objective, testable statement that describes what
happens and why it happens
TERM 10
normative analysis
DEFINITION 10
a subjective, contestable, statement that attempts to
describe what should be done
what can expand a p.p.
curve?
-Advancement in technology -improvements in labor -new
sources of natural resources
TERM 17
law of demand
DEFINITION 17
the quality of a good or service varies immensely with it's
price
TERM 18
Market demand curve
DEFINITION 18
the horizontal summation of individual demand curves
TERM 19
non-price determinants of a demand curve
DEFINITION 19
-price of related goods -income -number of buyers -tastes -
expectations
TERM 20
law of supply
DEFINITION 20
the higher the price of the good the greater the quantity
supplied
market supply curve
a graphical representation of the amount of the amount of
goods and services that supplies are willing and able to
supply at various prices
TERM 22
non-price determinants of a supply curve
DEFINITION 22
-input prices -prices of substitutes -expectations -number of
suppliers -technology regulation -taxes and substitutes -
weather
TERM 23
market equil.
DEFINITION 23
the point at which the market supply and market demand
curves intersect
TERM 24
equilibrium price
DEFINITION 24
the price at the intersection of the Marketing supply and
demand curves; at this price the quantity demanded equals
the quantity supplied
