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Chapter 1 and 2 Vocabulary

Teacher: Professor Glenda Evans
Across
All possible consumption combinations of goods that someone can afford, given the prices of goods, when all income is spent; the boundary of the opportunity set
Policy that involves altering the level of interest rates, the availability of credit in the economy, and the extent of borrowing
Studies how individuals, institutions, and society make the optimal or best choices under conditions of scarcity
The trend in which buying and selling in markets have increasingly crossed national borders
An economy where economic decisions are passed down from government authority and where resources are owned by the government
A diagram that shows the productively efficient combinations of two products that an economy can produce given the resources it has available
A place, institution, or process where buyers or sellers interact with each other
Economic policies that involve government spending and taxes
When it is impossible to produce more of one good (or service) without decreasing the quantity produced of another good (or service)
Statement which describes the world as it is
The satisfaction derived from consuming a good or service
Studies the economic behavior of individuals, particular markets, firms, or industries
A representation of an object or situation that is simplified while including enough of the key features to help us understand the object or situation
Condition under which economic wants are unlimited and the means or resources to satisfy those wants are limited
A diagram that views the economy as consisting of households and firms interacting in a goods and services market and a labor market
Down
Costs that are made in the past and cannot be recovered
When the average cost of producing each individual unit declines as total output increases.
Used to assess how the margial costs of a decision compare with marginal benfits
Looks at the entire economy or its major aggregates or sectors, such as households, businesses, or government
When the mix of goods being produced represents the mix that society most desires
Statement which describes how the world should be
The way in which the work required to produce a good or service is divided into tasks performed by different workers
Typically an agricultural economy where things are done the same as they have always been done