| A | B |
|---|
| scarcity | limited resources, unlimited wants |
| opportunity cost | what is given up when making a choice |
| factor of production | land, labor, capital |
| specialization | concentrating on one job |
| microeconomics | study of the small units of the economy |
| macroeconomics | study of the major units of the economy |
| PPF | shows the limits of a nations productivity |
| circular flow | shows the movement of resources & money |
| capital goods | resources used to create other resources |
| consumer goods | items individuals use |
| traditional | economic choices made the way things have always been done |
| command | economic decisions made by a central authority |
| market | economic decisions made through supply and demand |
| mixed | a combination of economic systems |
| Invisible Hand Theory | the market distributes resources through supply & demand |
| supply | the amount of goods or services available |
| demand | the amount of goods or services consumers want |
| equilibrium | when quantity supplied and quantity demanded are equal |
| price ceiling | a maximum price set by the government |
| price floor | a minimum price set by the government |
| shortage | when quantity demanded is less than quantity supplied |
| surplus | when quantity supplied is greater than quantity demanded |
| diminishing marginal utility | each addition item purchased brings less usefulness |
| elastic demand | purchases are very responsive to price change |
| inelastic demand | purchases are not very responsive to price change |
| entrepreneurship | risk taking to start a new business |
| sole proprietor | a business owned & managed by an individual |
| partnership | business owned and run by 2 or more people |
| corporation | business owned by stockholders |
| unlimited liability | responsible for all debts |
| limited liability | not responsible for debts of a business |
| stock | ownership share in a corporation |
| bond | loan instrument to a business or government entity |
| perfect competition | many buyers and many producers compete in the market |
| monopolistic competition | differentiated products sold under the laws of supply & demand |
| oligopoly | market where a few, large producers control the market |
| monopoly | market where a single seller controls the market |
| labor union | organization of workers negotiating for better pay & conditions |
| collective bargaining | process where workers and management meet to negotiate labor contracts |
| Gross Domestic Product | dollar value of all final goods and services produced in a year |
| Consumer Price Index | measurement of changes in the prices of items purchased by families |
| business cycles | recurring cycles of expansion and contraction |
| unemployment rate | percentage of people in civilian work force not holding jobs |
| inflation | sustained increase in prices |
| structural unemployment | out of work because of technology changes |
| frictional unemployment | out of work between jobs |
| seasonal unemployment | out of work from seasonal variation of the economy |
| cyclical unemployment | out of work because of a recession |
| monetary policy | stabilization with control of the money supply |
| fiscal policy | stabilization with taxing and spending |
