Economics Unit 1: Introduction to Economics

The study of human behavior, especially when making decisions about needs and wants, focusing on the interplay of scarcity and choice.

The fundamental problem in economics, where limited resources cannot meet unlimited wants and needs.

Focuses on individual choices and the interplay between businesses and consumers.

Focuses on the economy as a whole, studying things like inflation, unemployment, and growth.

A choice made when the benefits outweigh the costs.

The satisfaction or usefulness that consumers gain from consuming something.

The cost of choosing one option over another. It is the value of the next best alternative that is forgone.

The three basic questions every economy must answer to allocate its resources.

The ability to produce a combination of goods and services at a certain point in time, given a set of resources.

A situation where the quantity of goods produced is less than the maximum possible with available resources. Points inside the PPC.

A situation where the quantity of goods produced is the maximum possible with available resources.

A situation where the quantity of goods produced is impossible given available resources. Points outside the PPC.

The cost of producing one additional unit of a good does not change as production increases.

The cost of producing one additional unit of a good increases as production increases.

The principle that as more units of a variable input are added to a fixed input, the marginal output will eventually decrease.

The principle that as all inputs are increased proportionally, the output will increase at a faster rate.

The framework for how goods and services are produced, distributed, and consumed within a society.

An economic system where the government controls all aspects of production and resource allocation.

An economic system driven by supply and demand, with minimal government intervention.

An economic system that combines elements of both market and command economies, allowing for both private and public ownership.

An economic system that relies on traditional customs, beliefs, and practices for economic decisions.

The idea that as production increases, the cost per unit of output decreases.

Using resources efficiently to maximize output.

Producing the maximum output with the minimum waste.

Money set aside for future use, like a special fund for a vacation or a new car.

Bank accounts that earn interest on your deposits, meaning your money grows over time.

A plan for how you save your money, with goals and strategies in mind.

The total demand for a specific product from all consumers in the market.

The additional satisfaction you get from consuming one more unit of a good decreases as you consume more.

The quantity of a good or service that consumers are willing and able to buy at different prices.

The change in the quantity demanded due to a change in consumer purchasing power because of price changes.

Goods that you buy less of as your income increases, like cheaper instant noodles.

Costs that remain constant, regardless of changes in production or sales, such as rent or insurance.

A business model where an individual operates under an established brand, using the brand's name, logo, and operating procedures.

Low-risk investments with guaranteed returns over a fixed term, generally offered by banks or financial institutions.

Total earnings before deductions such as taxes, representing the total revenue generated by an individual or business.

Money earned through work, investments, or business activities.

A business owned and operated by two or more individuals, sharing profits, losses, and responsibilities.

The original amount of money borrowed or invested, forming the foundation of the investment or debt.

The profit made on an investment, expressed as a percentage, representing the return on the initial investment.

The point where the quantity of a good or service that buyers are willing to purchase (demand) equals the quantity that sellers are willing to produce (supply). This determines the market price, where both buyers and sellers are satisfied.

The ability of a firm to influence the price of a good or service in the market. This power is usually more prominent in markets with fewer competitors, like monopolies or oligopolies.

The total amount of a good or service that producers are willing and able to offer for sale at a given price. It represents the collective supply of all producers in a market.

The additional satisfaction a consumer gains from consuming one more unit of a particular good or service. The more you consume, the less extra satisfaction you get.

A market structure where there is only one seller of a particular good or service, with no close substitutes. This gives the firm significant control over the market price and production.

A market structure with numerous sellers offering differentiated products. Entry into the market is relatively easy, allowing for competition.

Factors other than price that influence the demand for a good or service. They include changes in income, consumer preferences, prices of related goods, and the number of consumers.

A factor affecting supply where unexpected events, such as natural disasters, wars, or economic crises, disrupt the production and distribution of goods.