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a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade
the study of the choices of consumer, business managers, and government officials to attain their goals given their scarce resources
situation in which unlimited wants exceed the limited resources available to fulfill those wants; we must make choices because of this.
the idea that, because of scarcity, producing more of one good or service means producing less of another good or service
highest valued alternative that must be given up to engage in an activity
when the government decides how economic resources will be allocated (ex: North Korea, Soviet Union)
decisions of households and firms interacting in markets allocate economic resources
when economic decisions result from both interaction of buyers and sellers in the market and government plays a role in the allocation of the resources
the ability of an economy to produce increasing quantities of goods and services
occurs when a good or service is produced at the lowest possible cost
occurs when production is in accordance with consumer preferences
occurs in markets when both buyer and seller of a product are made better off by the transaction
goods and services bought domestically but produced in other countries
the fair distribution of economic benefits
simplified version of reality used to analyze real-world economic situations
analysis concerned with "what is"
analysis concerned with "what should be"
study of how households and firms make choices, how they interact in markets and how the government attempts to influence their choices
study of economy as a whole including topics such as inflation, unemployment, and economic growth
organization that produces a good or service
someone who operates a business; decides "what" and "how"
practical application of an inventions; significant improvement in a good or in the means of producing a good
processes it uses to produce goods and services
tangible merchandise (ex: books/computers)
activities done for others (ex: haircuts)
total amount a firm receives for selling a good or service
the difference between a firm's revenue and its costs
all persons occupying a house
used by firms to produce goods and services
financial: stocks and bonds
physical: computers, machine tools
accumulated training and skills that workers posses
something measurable that can have different values (ex: income)
