Macroeconomics ECON201 2
Terms
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- Full Employment
- The use of all available resources. All workers who are willing & able to work.
- Full Production
- Employment of available resources so that the max amt of (or total value of) goods & services is produced.
- Productive Efficiency
- The production of a good in the least costly way.
- Allocative Efficiency
- The output of each product at which its marginal cost & price or marginal benefit are equal.
- Consumer Goods
- Products & services that satisfy human wants directly.
- Production Possibilities Table
- Lists the different combinations of two products that can be produced w/ a specific set of resources.
- Production Possibilities Curve
- A curve showing the different combinations of two goods or services that can be produced.
- Opportunity Cost
- The amt of other products that must be forgone or sacrificed to produce a unit of a product.
- Law of Increasing Opportunity Costs
- The principle that as the production of a good increases, the opportunity cost of producing an addtional unit rises.
- Economic Growth
- An outward shift in the production possibilities curve...an increase of real output (GDP) or real output per capita.
- Economic System
- A method of organizing an economy (market & command systems being the two general types)
- Market System
- Product & resource markets of a mkt economy & the relationships among them.
- Capitalism
- An economic system in which property resources are privately owned & mkts & prices are used to direct & coord economic activities.
- Command System
- An economic system in which property resources are publicly owned & govt uses central economic planning to direct & coord economic activities.
- Resource Market
- A mkt in which households sell & firms buy resources or the services of resources.
- Product Market
- A mkt in which products are sold by firms and bought by households.
- Circular Flow Model
- The flow of resources from households to firms and of products from firms to households. These flows are accompanied by reverse flows of $ from firms to households & from households to firms.