Macroeconomics exam 1
marginal analysis
Making choices based on comparing marginal benefits with marginal costs
Opportunity cost
Next best thing that must be forgone in order to produce one more unit of a given product.
mutually agreeable
Economic transactions willingly undertaken by both the buyer and the seller because each feels that the transaction will make him or her better off
Freedom of choice
Freedom of resource owners to dispose of their resources as they think best; of workers to enter any line of work for which they are qualified; and of consumers to spend their incomes in whatever way they feel is most appropriate
Economics
Social Science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity
market
an institution that brings buyers and sellers together together
freedom of enterprise
the freedom of firms to obtain economic resources, and sell those products in markets of their choice
utility
the pleasure, happiness, or satisfaction obtained from consuming a good or service
competition
the presence in a market of independent buyers and sellers who compete with one another and who are free to enter and exit the market as they see fit
private property
the right of private persons and firms to obtain, control, employ, dispose of, and bequeath land, capital, and other property
self interest
what each individual or firm believes is best for itself and seeks to obtain