Economics Chapter 2

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  1. the choices necessitated because society's
    economic wants for goods and services are unlimited but the resources available
    to satisfy these wants are limited (scarce)
    economizing problem
  2. the want-satisfying power of a good or service;
    the satisfaction or pleasure a consumer obtains from the consumption of a good
    or service (or from the consumption of a collection of goods and services)
  3. the land, labor, capital, and entrepreneurial
    ability that are used in the production of goods and services; productive
    agents; factors of production
    economic resources
  4. natural resources ("free gifts of
    nature") used to produce goods and services
  5. (includes all manufactured aids used in
    producing consumer goods and services –all tools, machinery, equipment,
    factory, storage, transportation, and distribution facilities)

    human-made resources (buildings, machinery, and
    equipment) used to produce goods and services; goods that do not directly
    satisfy human wants; also called capital goods/investment goods
  6. spending for the production and accumulation of capital and additions to inventories
  7. people's physical and mental talents and efforts that are used to help produce goods and services
  8. the human resource that combines the other
    resources to produce a product, makes nonroutine decisions, innovates, and
    bears risks
    entrepreneurial ability
  9. economic resources: land, capital, labor, and
    entrepreneurial ability
    factors of production
  10. (1) the use of all available resources to
    produce want-satisfying goods and services; (2) the situation in which the
    unemployment rate is equal to the full-employment unemployment rate and there
    is frictional and structural but no cyclical unemployment and the real GDP of
    the economy equals potential output)
    full employment
  11. employment of available resources so that the
    maximum amount of (or total value of) goods and services is produced; occurs
    when both productive efficiency and allocative efficiency are realized
    full production
  12. the production of a good in the least costly
    way; occurs when production takes place at the output at which average total
    cost is a minimum and marginal product per dollar's worth of input is the same
    for all inputs
    productive efficiency
  13. the apportionment of resources among firms and industries to obtain the production of the products most wanted by society (consumers); the output of each product at which its marginal cost and price or marginal benefit are equal
    allocative efficiency
  14. products and services that satisfy human wants directly
    consumer goods
  15. satisfy wants indirectly by aiding the production of consumer goods

    (capital) human made resources (buildings,
    machinery, and equipment) used to produce goods and services; goods that do not
    directly satisfy human wants; also called capital goods
    capital goods
  16. a curve showing the different combinations of two goods or services that can be produced in a full-employment, full-production
    economy where the available supplies of resources and technology are fixed
    production possibilities curve
  17. table listing the different combinations of two
    products that can be produced with a specific set of resources (and with full
    employment and productive efficiency)
    production possibilities table
  18. the amount of other products that must be
    forgone or sacrificed to produce a unit of a product
    opportunity cost
  19. the principle that as the production of a good
    increases, the opportunity cost of producing an additional unit rises
    law of increasing opportunity costs
  20. (1) an outward shift in the production
    possibilities curve that results from an increase in resource supplies or
    quality or an improvement in technology (2) an increase of real output (gross
    domestic product) or real output per capita
    economic growth
  21. a particular set of institutional arrangements
    and a coordinating mechanism for solving the economizing problem; a method or
    organizing an economy, of which the market system and the command system are
    the two general types
    economic system
  22. all the product and resource markets of a market
    economy and the relationships among them; a method that allows the prices
    determined in those markets to allocate the economy's scarce resources and to
    communicate and coordinate the decisions made by consumers, firms, and resource
    market system
  23. an economic system in which property resources are privately owned and markets and prices are used to direct and coordinate economic activities
  24. a method or organizing an economy in which
    property resources are publicly owned and government  uses central economic planning to direct and coordinate economic activities; command economy
    command system
  25. a market in which households sell and firms buy resources or the services of resources
    resource market
  26. a market in which products are sold by firms and bought by households
    product market
  27. the flow of resources from households to firms and of products from firms to household. These flows are accompanied by revers flows of money from firms to households and form households to firms.
    circular flow model
Card Set:
Economics Chapter 2
2013-09-23 05:13:40

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