1.

Scarcity: The condition that exists because human wants exceed the capacity of
available resources to satisfy those wants; also a situation in which a resource has more than one valuable use. The problem of scarcity faces all individuals and organizations, including firms and government agencies 2. Needs/Wants: Desires that can be satisfied by consuming or using a good or service. Economists do not differentiate between wants and needs/(not finish)

3. Production Possibility Curve: A graphical representation of the alternative combinations of the amounts of two good or services that an economy can produce by transferring resources from one good or service to the other. This curve helps in determining what quantity of nonessential good or a service an economy can afford to produce without jeopardizing the required production of an essential good service. Also called transformation curve. 4. Opportunity Cost: The second-best alternative (or the value of that alternative) that
must be given up when scarce resources are used for one purpose instead of another

5. Absolute Advantage: The ability to produce more units of a good or service than some
other producer, using the same quantity of resources. 6. Comparative Advantage: The ability to produce a good or service at a lower opportunity cost than some other producer. This is the economic basis for specialization and trade. 7. Market System: Economic system that relies upon markets to allocate resources and determine prices.

8. blah blah 9. Pure Competition: Market for a homogenous product in which there are many producers and consumers, none of which are large enough to have any individual effect upon the market on their own. In theory such a market produces the largest output at the lowest price. There are few, if any real-world markets of this nature; probably the closest in the United States are markets for farm products. Monopolistic Competition: A market structure in which slightly differentiated

products are sold by a large number of relatively small producers, and in which the barriers to new firms entering the market are low. Oligopoly: A market structure in which a few, relatively large firms account for all or most of the production or sales of a good or service in a particular market, and where barriers to new firms entering the market are very high. Some oligopolies produce homogeneous products; others produce heterogeneous products. Monopoly: A market structure in which there is a single supplier of a good or service. Also, a firm that is the single supplier of a good or service for which there are no close substitutes; also known as a monopolist. 11. Supply: The total amount of a good or service available for purchase; along with demand, one of the two key determinants of price. 12. Demand: The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases. Demand for a good or service is determined by many different factors other than price, such as the price of substitute good and complementary goods. In extreme cases, demand may be completely unrelated to price, or nearly infinite at a given price. Along with supply, demand is one of the two jey determinants of the markets price. 13. Quantity Supplied: The amount of a good or service sellers are willing and able to offer at a given price in a given period of time.

14. Quantity Demand: The amount of a good or service people will buy at a given price in
a given period of time. 15. later 16. Equilibrium Price and Quantity: The price at which the quantity demanded by buyers equals the quantity supplied by sellers; also called the market-clearing price/The quantity demanded and quantity supplied at the equilibrium or market-clearing price. 17. Price Elasticity of Demand: The responsiveness of the quantity demanded of a good or service to changes in its price. The price elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price. 18. Elastic Demand: Price elasticity of demand is the percentage change in quantity demanded as a result of the percentage change in demand price. Generally, a relative response of a change in quantity demanded to a relative change in price. 19. Inelastic Demand: Desire for a product or service that not vary with increases or decreases in price. Products that are daily necessities, and for which there are few alternatives, tend to exhibit inelastic demand. For example, the demand for bar soap, sail, and milk is relatively inelastic. In contrast , demand for vacation travel, premium ice cream, and entertainment tends to be elastic. 20. Unit Elastic Demand: cant find 21. Business Cycle- Peak: High point of the business cycle of some particular phase of economic activity. For example, summer is the time of peak electrical demand for utilities as people run their air conditioners. Recession: A decline in the rate of national economic activity, usually measured by a decline in real GDP for at least two consecutive quarters. Trough: Low point or local minimum. Recovery: A period in business cycle following a recession, during which the GDP rises. 22. Inflation: A rise in the general or average price level of all the goods and services produced in an economy. Can be caused by pressure from the demand side of the market (demand-pull inflation) or pressure from the supply side of the market (costpush inflation). 23. Deflation: A sustained decrease in the average price level of all the goods and services produced in the economy. 24. Stagflation: High inflation and high unemployment(stagnation) occurring simultaneously. 25. Unemployment: An economic condition marked by the fact that individuals actively seeking jobs remain unhired. Unemployment is expressed as a percentage of the total available work force. The level of unemployment varies with economic conditions and other circumstances. 26. Economic Growth: A positive change in the level of production of goods and services by a country over a certain period of time. Nominal growth is defined as economic growth including inflation, while real growth is nominal growth minus inflation. Economic growth is usually brought about by technological innovation and positive external forces. 27. Interest Rate: A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of principal. It is calculated by dividing the amount of interest by the amount of principle. Interest rates often change as a result of inflation and Federal Reserve Board policies. 28. National Income Accounting: A recorded aggregate of the national economic activity over a pre-set period of time. The types of economics activity monitored and

accounted for might be the profits made by domestic companies, income from taxes and sales, and wages paid to workers. 29. Gross Domestic Product: The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. 30. Real GDP: