Flashcards
AP Economics: Basic Definitions
Cards in this deck (20)
- 1EconomicsA social science that studies how resources are used and is often concerned with how resources can be used to their fullest potential
- 2MacroeconomicsInvolves economic problems encountered by the nation as a whole
- 3MicroeconomicsConcerned with the economic problems faced by individual units within the overall economy (families, individuals, firms)
- 4ResourceAnything that can be used to produce a good or service
- 5LandAll Natural Resources
- 6Labori) all human attributes that are productive
ii) service, function, or task performed to produce something - 7Capitalproductive equipment or machinery
- 8Opportunity CostWhat must be sacrificed in order to obtain something
- 9EfficiencyImplies using resources to their fullest potential
- 10Law of Increasing CostsAs more of a product is produced, the opportunity cost increases
- 11Absolute AdvantageThe ability to produce something more efficiently
- 12Comparative AdvantageThe ability to produce something with a lower opportunity cost
- 13ImplicationsTrade can be mutually advantageous to both countries even if one country has the absolute advantage in all products
- 14CapitalismAn economic system where supply and demand determine prices
- 15EquilibriumA state of balance between the opposing forces of shortages and surpluses
- 16The Circular Flow DiagramDiagram that shows how households and firms are related by the exchange of resources and products
- 17Disciplinarianscompetitive pressures to keep prices down to the market norm of efficiency
- 18Price ceilingprohibits prices to rise above a certain level
- 19Consumer SurplusThe difference between the utility gained and the price paid by the consumer.
- 20ExternalitiesSome of the benefits or costs of a transaction accrue to the public as social costs or benefits
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- Flashcards on AP Economics: Basic Definitions , created by scottpcoen on 21/03/2014.
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