Unit 1 - Basic Economic Concepts Guide

the ability of an individual to coordinate the other categories of resources to produce a good or service.

a sustained rise in aggregate output and an increase in standard of living (causes are developments in technology, or an increase in resources)

unlimited wants, limited resources (example: land)

to understand behavior are proved via a full procedure of hypothesis and testing.

we consider the big picture- the nations economy as a whole.

is directed at the roles households and firms play and how their decision- making and allocation of resources impact the overall economy.

There are ________ which are protected, however, the government is able to intervene in order to meet societal aims.

If the ________ is linear, it has a constant opportunity cost, if it is curved, it has increasing opportunity costs.

The economy has to decide what goods and services the society needs in order to properly ________.

to maximize utility, marginal utility per dollar spend on each good= service in consumption bundle, MUc /Pc= MUt /Pt.

The ability of a firm to produce a good or service at the lowest possible cost.

This is the cost we forgo or sacrifice, to opt for another choice.

filters our scope to individuals in an economy while keeping the overall economy in mind.

education and training an individual has that is used in the production of a good or service.

physical labor, skills, and effort devoted into a task where workers are paid.

Occurs when a firm as the ability to produce a specific amount of goods or services in comparison to the others.

is usually referred to as the liquid asset, or monetary value.

lowest cost possible on the PPC.

the economy allocates resources so consumers are well off as possible, producing what is demanded.

tools and equipment used to produce a good or service.

this approach to economics is based on facts and figures.

filters our scope to individuals in an economy while keeping the overall economy in mind

natural resources and raw material

physical labor, skills, and effort devoted into a task where workers are paid

is usually referred to as the liquid asset, or monetary value

tools and equipment used to produce a good or service

education and training an individual has that is used in the production of a good or service

the ability of an individual to coordinate the other categories of resources to produce a good or service

The alternative choice which must be given up in order to make a decision

This is the cost we forgo or sacrifice, to opt for another choice

this approach to economics is based on facts and figures

this approach to economics is based on assumptions

a sustained rise in aggregate output and an increase in standard of living (causes are developments in technology, or an increase in resources)

lowest cost possible on the PPC

the economy allocates resources so consumers are well off as possible, producing what is demanded

Occurs when a firm as the ability to produce a specific amount of goods or services in comparison to the others

The ability of a firm to produce a good or service at the lowest possible cost

people split up the work, and provide each other with a good in return for another

goods that make consumer goods (ex

goods that are consumed (ex

monetary or non-monetary opportunity costs in terms of making a choice

traditional out of pocket costs which are associated with choosing one course of action

the measure of personal satisfaction (util is a unit of utility)

the change in total utility by consumer one additional unit of that good/service

additional units of a good/service add less total utility than the previous units do

MUgood/Pgood (marginal utility of one unit of the good / price of one unit of the good)

to maximize utility, marginal utility per dollar spend on each good = service in consumption bundle, MUc/Pc = MUt/Pt