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Definitions for key terms and concepts in both micro and macroeconomics, including incentives, economics, resources, wants, production, labor, opportunity cost, technology, efficiency, consumption, market, demand, supply, subsidy, equilibrium, shortage, surplus, price system, voluntary exchange, terms of exchange, transaction costs, price controls, price ceiling, price floor, black market, rent control, and minimum wage.
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Rewards for engaging in a particular activity. TERM 2
DEFINITION 2 The study of how people allocate their limited resources to satisfy their unlimited wants. TERM 3
DEFINITION 3 Things used to produce goods and services to satisfy people's wants. TERM 4
DEFINITION 4 what people would buy if their incomes were unlimited TERM 5
DEFINITION 5 The Study of decisions making undertaken by individuals and by firms
The study of the behavior of the economy as a whole including such economywide phenomena as changes in unemployment, the general price level and national income TERM 7
DEFINITION 7 Total amounts or quantities aggregate demand for example is total planned expenditures throughout a nation TERM 8
DEFINITION 8 The Assumption that people do not intentionally make decisions that would leave them worse off TERM 9
DEFINITION 9 Simplified representation of the real world used as the basis for predictions or explanations TERM 10
DEFINITION 10 the assumption that nothing changes except the factor or factors being studied
The case in which a given level of outputs is used to produce the maximum output possible. Alternatively the situation in which a given output is produced at a minimum cost Highest output for lowest cost TERM 17
DEFINITION 17 The use of goods and services for personal satisfaction TERM 18
DEFINITION 18 All of the arrangements that individuals have for exchanging with one another. thus for example we can speak of the labor market the automobile market and the credit market TERM 19
DEFINITION 19 A schedule showing how much of a good or service people will purchase at any price during a specified time period, other things being constant TERM 20
DEFINITION 20 The observation that there is a negative or inverse relationship between the price of any good or service and the quantity demanded holding other factors constant
The Money price of one commodity divided by the money price of another commodity the number of units of one commodity that must be sacrificed to purchase one unit of another commodity. TERM 22
DEFINITION 22 The Observation that there is a negative or inverse relationship between the price of any good or service and the quantity demanded holding other factors constant TERM 23
DEFINITION 23 The price that we observe today expressed in today's dollar. also called the absolute or nominal price TERM 24
DEFINITION 24 A graphical representation of the demand schedule a negatively sloped line showing the inverse relationship between between the price and the quantity demanded TERM 25
DEFINITION 25 The demand of all consumers in the marketplace for the particular good or service the summation at each price of the quantity demanded by each individual
A schedule showing the relationship between price and quantity supplied for a specified period of time. other things being equal TERM 32
DEFINITION 32 the observation that the higher price of a good the more of that good sellers will make available over a specified time period other things being equal. TERM 33
DEFINITION 33 The graphical representation of the supply schedule a line curve showing the supply schedule which generally slopes upward other things being equal. TERM 34
DEFINITION 34 A negative tax, a payment to a producer from the government usually in the form of a cash grant per unit TERM 35
DEFINITION 35 price where the demand curve intersects the supply curve
the situation when quantity supplied equals quantity demanded at a particular price TERM 37
DEFINITION 37 situation in which quantity demanded is greater than quantity supplied at a price below the market clearing price TERM 38
DEFINITION 38 situation in which quantity supplied is greater than the quantity demanded at a price above the market clearing price TERM 39
DEFINITION 39 Economic system in which relative prices are constantly changing to reflect changes in supply and demand for different commodities the prices of those commodities are signals to everyone within the system as to what is relatively scarce and what is relatively abundant TERM 40
DEFINITION 40 an act of trading done on an elective basis. in which both parties to the trade expect to be better off after the exchange
A market in which goods are traded at prices above their legas maximum prices or in which illegal goods are sold. TERM 47
DEFINITION 47 price Ceilings on rents TERM 48
DEFINITION 48 A wage floor, legislated by government setting the lowest hourly rate that firms may legally pay workers TERM 49
DEFINITION 49 A physical supply restriction on imports of a particular good such as sugar foreign exporters are unable to sell in the United States more than the quantity specified in the import quota
