Economics Ch. 1 – Flashcards

Asituation in which unlimted wants exceeds the limited resources available to fullfill those wants.

The study of the choices people make to attain their goals, given their scarce resources.

The study of the choices people, make to attain their goals, given their scarce resources.

Analysis that involoves comparing marginal benifits and marginal costs.

The idea that because of scarcity, producing more of one good or service means producing less of another good or service.

The highest valued given alternative that must be given up to engage in an activity.

An economy in which the government decides how economic resources will be allocated.

An economy in which the desicions of households and firms interacting in markets allocate economic resources.

An economy in which most economic descions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.

A situation in which a good or service is produced at the lowest possible cost.

A state of the economy in which production is in accordance with consumerprefrences, in particular, every good or serivce is produced up to the point where the last unit provides a marginal benifit to socitey equal to the marginal cost of producing it.

A situation that occurs in markets when both the buyer and seller of a product are made better off by the transaction.

Something measurable that can have different values, such as the wages of software programmers.

Analysis concerned with what is .

Analysis concerned with what ought to be

The study of how households and firms make choices, how they intereact in markets, and how the government attempts to influence their choices.

The study of the economy as a whole, including topics such as inflation, unemployment and economic growth.