George Orwell And Analysis Totalitarian Goverment Lincoln Essay

3979 words - 16 pages

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AP Microeconomics Vocabulary 2014
This is a list of every microeconomic term that must be known for the exam.
1. Microeconomics - The branch of economics that studies the economy of consumers or households or individual
firms.
2. Macroeconomics - The branch of economics that studies the overall working of a national economy.
3. Scarcity - Scarcity is the fundamental economic problem of having seemingly unlimited human needs and wants,
in a world of limited resources. It states that society has insufficient productive resources to fulfil all human wants and
needs
4. Economic Efficiency - The use of resources so as to maximize the production of goods and services.
5. Economic Equity - Equity is the concept or idea of fairness.
6. Opportunity Cost - The cost of an opportunity forgone (and the loss of the benefits that could be received from
that opportunity).
7. Productivity - The ratio of the quantity and quality of units produced to the labor per unit of time.
8. Inflation - A general and progressive increase in prices.
9. Philips Curve - A historical inverse relationship between the rate of unemployment and the rate of inflation in an
economy. Stated simply, the lower the unemployment in an economy, the higher the rate of inflation.
10. Market Power - The ability of a firm to alter the market price of a good or service. In perfectly competitive
markets, market participants have no market power. A firm with market power can raise prices without losing its
customers to competitors.
11. Externality - A cost or benefit, not transmitted through prices, incurred by a party who did not agree to the action
causing the cost or benefit.
12. Market Failure - A concept within economic theory wherein the allocation of goods and services by a free market
is not efficient.
13. Market Economy - A market economy is economy based on the power of division of labor in which the prices of
goods and services are determined in a free price system set by supply and demand.
14. Marginal Change - A small change in some quantity.
15. Production Possibilities Frontier - A graph that shows the different rates of production of two goods and/or
services that an economy can produce efficiently during a specified period of time.
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16. Circular-Flow Model - A simple economic model which describes the reciprocal circulation of income between
producers and consumers.
17. Positive Statement - A statement about what actually is (was or will be), as opposed to what ought to be. An
expression that can be verified by observation.
18. Normative Statement - expresses a judgement about whether a situation is desirable or undesirable. "The world
would be a better place if the moon were made of green cheese" is a normative statement because it expresses a
judgement about what ought to be.
19. Comparative Advantage - The ability of a party (an individual, a firm, or a country) to produce a particular good
or service at a lower opportunity cost than another party.
20. Absolute Advantage -...

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