Economics Individual choice Economy Market economy Resource Land Labor Physical capital Human capital Scarce Opportunity cost Microeconomics Macroeconomics Economic aggregates Positive economics Normative economics Model Other things equal assumption Circular-flow diagram Household Firm Product markets Factor markets Trade-off Production possibility frontier (PPF) Efficient Factors of production Technology Trade Gains from trade Specialization Comparative advantage Absolute advantage | an organization that produces goods and services for sale. the branch of economics that studies how people make decisions and how those decisions interact. a system for coordinating a society’s productive and consumptive activities. the decision by an individual of what to do, which necessarily involves a decision of what not to do. the resources used to produce goods and services. The main factors of production are land, labor, physical capital, and human capital. an economic principle that states that by dividing tasks and trading, people can get more of what they want through trade than they could if they tried to be self-sufficient. the advantage conferred by the ability to produce more of a good or service with a given amount of time and resources; not the same thing as comparative advantage. economic measures that summarize data across different markets for goods, services, workers, and assets. a diagram that represents the transactions in an economy by two kinds of flows around a circle: flows of physical things such as goods or labor in one direction and flows of money to pay for these physical things in the opposite direction. a model that 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. markets where goods and services are bought and sold. the advantage conferred if the opportunity cost of producing the good or service is lower for another producer. the branch of economics that is concerned with the overall ups and downs in the economy. the technical means for the production of goods and services. describes a market or economy that takes all opportunities to make some people better off without making other people worse off. the branch of economic analysis that describes the way the economy actually works. the effort of workers. all resources that come from nature, such as minerals, timber, and petroleum. an economy in which decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions. a person or a group of people who share income. a situation in which each person engages in the task that he or she is good at performing. the branch of economic analysis that makes prescriptions about the way the economy should work. in the development of a model, the assumption that all relevant factors except the one under study remain unchanged. human-made goods such as buildings and machines used to produce other goods and services. anything, such as land, labor, human capital, and physical capital, that can be used to produce something else; includes natural resources (from the physical environment) and human resources (labor, skill, intelligence). the improvement in labor created by the education and knowledge embodied in the workforce. markets where resources, especially capital and labor, are bought and sold. a simplified representation of a real situation that is used to better understand real-life situations. the practice, in a market economy, in which individuals provide goods and services to others and receive goods and services in return. in short supply; a resource is scarce when there is not enough of the resource available to satisfy all the various ways a society wants to use it. the real cost of an item: what you must give up in order to get it. the study of scarcity and choice. the giving up of something in order to have something else. |
Economics
Individual choice
Economy
Market economy
Resource
Land
Labor
Physical capital
Human capital
Scarce
Opportunity cost
Microeconomics
Macroeconomics
Economic aggregates
Positive economics
Normative economics
Model
Other things equal assumption
Circular-flow diagram
Household
Firm
Product markets
Factor markets
Trade-off
Production possibility frontier (PPF)
Efficient
Factors of production
Technology
Trade
Gains from trade
Specialization
Comparative advantage
Absolute advantage