Chapter 1
Variable
A measure of something that can take on different values
Marginal Change
A small, one-unit change in value
Positive Analysis
Answers the question "What is?" or "What will be?"
Normative Analysis
Answers the question "What ought to be?"
Natural Resources
Resources provided by nature and used to produce goods and services.
Ceteris Paribus
The Latin expression meaning other variables being held fixed
Entrepreneurship
The effort used to coordinate factors of production-natural resources, labor, physical capital, and human capital- to produce and sell products.
Human Capital
The knowledge and skills acquired by a worker through education and experience.
Labor
The physical and mental effort people use to produce goods and services
Five Factors of production
The resources used to produce goods and services, also known as production inputs. -Natural resources -Labor -physical capital -Human capital -Entrepreneurship
Physical Capital
The stock of equipment, machines, structures, and infrastructures that is use to produce goods and services.
Economics
The study of choices when there is scarcity
Microeconomics
The study of the choices made by households (an individual or group of people living together), firms, and government and how these choices affect the markets for goods and services.
Macroeconomics
The study of the nation's economy as a whole, it focuses on the issues of inflation, unemployment, and economic growth.
scarcity
the resources we use to produce goods and services are limited