AP Macro Unit 1 Vocab

The comparison of marginal ("extra") benefits and mariginal costs, usually for decision making

The part of economics concerned with the economy as a whole; with such major aggregates as the household, business, and government sectors; and with measures of the total economy

In economics, spending for the production and accumulation of capital and additions to inventories

The presence in a market of independent buyers and sellers competing with one another along with the freedom of buyers and sellers to enter and leave the market

Any item that is generally acceptable to sellers in exchange for goods and services

A good or service whose consumption increases when income increases and falls when income decreases, price remaining constant

Products and services that are used together. When the price of one falls, the demand for the other increases. Vice Versa.

The principle that, other things equal, an increase in the price of a product will increase the quntity of it supplied, and conversly for a price decrease.

A legally established maximum price for a good or service

The amount of other products that must be forgone or sacrificed to produce a unit of a product

The part of economics concerned with decision making by individual unit such as a household, a firm, or an industry and with individual markets, specific goods and services, and product and resource prices

regulation or removal of government regulations on business activities

A particular set of institutional arrangements and a coordinating mechanism for solving the economizing problem; a method of organizing an economy, of which the market system and the command system are the two general types

An institution or mechanism that brings together buyers and sellers of a particular good or service

Determination by consumers of the types and quantities of goods and services that will be produced with the scarce resources of the economy; consumers' direction of production through their "dollar vote"

A market in which households sell and firms buy resources or the services or resources

The principle that, other things equal, an increase in a product's price will reduce the quantity of it demanded, and conversely for a decrease in price

A good or service whose consumption declines as income rises, prices held constant

The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price

refers to the degree to which individuals, consumers or producers change their demand or the amount supplied in response to price or income changes.

The want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service

The assumption that factors other than those being considered are held constant

Human-made resources used to produce goods and services; goods that do not directly satisfy human wants

Economic Resources: land, capital, labor, and entrepreneurial ability

The use of the resources of an individual, a firm, a region, or a nation to concentrate production on one or a small number of goods and services

The exchange of one good or service for another good or service

The tendency of firms and resource suppliers that seek to further their own self-interests in competitive markets to also promote the interests of society

A legal entity ("person") chartered by a state or the federal government that is distinct and separate from the individuals who own it

The amount by which the quantity demanded of a product exceeds the quantity supplied at a particular (below-equilibrium) price

A legally determined minimum price above the equilibrium price