Economics; Principles and Practices Chapter 1, Section 2
Terms
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- Trade-Offs
- Alternative choices when spending income or time
- Opportunity Cost
- Cost of next-best alternative use of money
- Mercantilism
- Increasing exports and precious metals
- Adam Smith
- Wrote "The Wealth of Nations". He argued that competition, together with the free-market system, would act as an invisible hand.
- Production Possibilities Frontier
- Diagram representing various combinations of goods and/or services an economy can produce when all productive resources are fully employed.
- Decision-making Grid
- A chart in which all financial possibilities and their drawbacks in a situation can be easily compared in a yes/no way.
- Specialization of Labor
- When labor becomes more productive because each worker becomes more skilled at a single job.
- Wealth
- The sum of the nation's goods produced by labor, regardless of who owns those goods.
- Invisible Hand
- Under competitive conditions, individuals acting of their own self-interest, and with a minimum of Government intervention, will bring about the greatest good for the society as a whole.
- Laissez-Faire
- No government intervention in economic affirs