Fundamentals of Economics
The condition where limited resources must be allocated among unlimited wants.
Scarcity
This type of market is where firms hire labor and purchase other inputs like land and capital.
Factor market
Percentage increase in prevailing price level.
Inflation
The process through which the world's cultures, governments, and economies become more connected through the spread of people, ideas, and goods.
Globalization
Highest valued forgone alternative.
Opportunity cost
What happens in the market for ice cream if the price of milk falls?
Supply increases
Outsourcing contributes to which type of unemployment?
Structural unemployment
Countries benefit from trade by specializing according to their
Comparative advantage
The way in which a society allocates resources, organizes production, and distributes goods and services.
Economic system
As the price of a good decreases, the quantity demanded increases.
Law of demand
A period of economic decline reflected by a fall in gross domestic product (GDP) and a rise in the unemployment rate
Recession
An increase in the value of a currency relative to another.
Appreciation
The equipment, tools, machinery, and so forth that are used in the production of a good or service.
Physical capital
A market structure in which a small number of producers control the supply of a good or service.
Oligopoly
Government policies related to spending and taxation to influence the macroeconomy.
Fiscal policy
The average material well‑being of people in a country, usually proxied by real GDP per capita.
Standard of living
Graph illustrating concepts of scarcity, opportunity cost, and efficiency.
Production possibilities frontier
What happens in the market for gas if everyone expects price to increase in the future?
Demand increases, supply decreases, price rises
What is the formula for calculating GDP using the expenditure approach? (also known as the national income accounting equation)
C + I + G + (X-M)
According to Theodore Schultz, what's the key to economic growth for developing nations?
Human capital investment