Economics

4. refers to the inherently limited nature of society’s resources, given society’s unlimited wants and needs
5. curve a graph of the relationship between the prices in the demand schedule and the quantity demanded at each of those prices
8. the limiting of one’s work to a particular area
10. factors that motivate a person to act or exert effort
12. capita GDP GDP per person
13. cycle a short‐run fluctuation in economic activity
14. the growth in the overall level of prices in an economy
16. market condition when the quantity supplied of a good is greater than the quantity demanded; also called excess supply
18. the study of the individual units that make up the economy
20. rule the rule stating that profit maximization occurs when a firm chooses the quantity of output that equates marginal revenue and marginal cost, or MR = MC
22. how easily something can be spent
23. money multiplier the rate at which banks multiply money when all currency is deposited into banks and they hold no excess reserves

1. a measure of the responsiveness of buyers and sellers to changes in price or income
2. paribus meaning “other things being equal,” the concept under which economists examine a change in one variable while holding everything else constant
3. costs costs that do not vary with a firm’s output in the short run; also known as overhead
4. a payment made by the government to encourage the consumption or production of a good or service
6. of account the measure in which prices are quoted
7. the study of the overall aspects and workings of an economy
9. price the price at which the quantity supplied is equal to the quantity demanded; also known as the market‐clearing price
11. curve a graph of the relationship between the prices in the supply schedule and the quantity supplied at each of those prices
15. domestic product (GDP) the market value of all final goods and services produced within a country during a specific period
17. advantage the situation where an individual, business, or country can produce at a lower opportunity cost than a competitor can
18. thinking the evaluation of whether the benefit of one more unit of something is greater than its cost
19. the tools and equipment used in the production of goods and services
21. of exchange what people trade for goods and services