Vocab 2
Economic Systems
Vocab 1
Chapter 2 Concepts
Grab Bag
100
The value of the next best option sacrificed for a chosen option
Opportunity Cost
100
An economic system that answers the What, How, and For Whom questions the way they have been answered for generations.
Traditional Economy
100
The branch of economics that studies decision making for the economy as a whole, rather than individual parts
Macroeconomics
100
This occurs when the production possibilities curve shifts outwards.
Economic Growth
100
Something that is being accepted as true.
Assumption
200
When an economy fails to fully use its resources, it produces less than the maximum output
Underutilization
200
An economic system that answers the What, How, and For Whom questions by a dictator or central authority.
Command Economy
200
A leader who seeks to make profits by combining resources to produce new goods and services
Entrepreneur
200
An analysis of the economy based on facts.
Positive Economics
200
All options given up when a decision is made.
Trade Off
300
A curve that shows the maximum possible output for an economy
Production Possibilities Curve
300
An economic system that answers the What, How, and For Whom questions based on voluntary exchange in markets.
Market Economy
300
The basic categories of inputs used to produce goods and services. The three categories are land, labor, and capital.
Resources
300
Comparing the added benefit to the added cost of a decision. It is what you will gain or lose if you make one additional unit of change.
Marginal Analysis
300
Any place or method used by buyers and sellers to exchange goods and services
Market
400
An analysis that compares the additional rewards and costs of an action
Cost Benefit Analysis
400
An economic system that answers the What, How, and For Whom questions through a mixture of traditional, command, and market systems.
Mixed Economy
400
The condition in which human wants are forever greater than the available supply of time, goods, and resources.
Scarcity
400
An analysis of the economy based on value judgements.
Normative Economics
400
The branch of economics that studies decision making by individuals, families, or businesses
Microeconomics
500
An economy produces the maximum output with given resources and technology
Efficiency
500
A phrase that expresses the belief that the best interests of a society are served by markets guided by self-interest
Invisible Hand
500
An economic system based on private ownership of resources and markets. Also called the free market system.
Capitalism
500
A simplification of reality used to understand the relationship between two variables.
Model
500
Buyers and sellers decide what to buy and what to sell with a minimum of government intervention
Voluntary Exchange
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