Microeconomics Exam 1 Vocabulary

Microeconomic s Exam 1

83 cards   |   Total Attempts: 182
  

Cards In This Set

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Allocative efficiency
A state of the economy in which production is in accordance with consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to socity equal to the marginal cost of producing it.
Centrally planned economy
An economy in which the government decides how economic resources will be allocated.
Economic model
A simplified version of reality used to analyze real-world economic situations.
Economic variable
Something measurable that can have different values, such as the wages of software programmers.
Economics
The study of the choices people make to attain their goals, given their scarce resources.
Equity
The fair distribution of economic benefits.
Macroeconomics
The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.
Marginal analysis
Analysis that involves comparing marginal benefits and marginal costs.
Market
A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade.
Market economy
An economy in which the decisions of households and firms interacting in markets allocate economic resources.
Microeconomics
The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
Mixed Economy
An economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.
Normative analysis
Analysis concerned with what ought to be.
Opportunity cost
The highest-valued alternative that must be given up to engage in an activity.
Positive analysis
Analysis concerned with what is.