Economics Unit 1 Review

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Ceteris Paribus

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A Latin phrase meaning 'all other things held constant', used in economics to isolate the effect of one variable.

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Comparative Advantage

Back

The ability of a country to produce a good at a lower opportunity cost than another country.

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Entrepreneurship

Back

The process of starting, organizing, managing, and assuming the responsibility for a business.

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Diminishing Marginal Utility

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The decrease in satisfaction or usefulness from having one more unit of the same product.

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Demand

Back

A consumer's desire, willingness, and ability to buy a good/service at various prices.

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Supply

Back

The total amount of a good or service available for purchase at any given price.

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Opportunity Cost

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The loss of potential gain from other alternatives when one alternative is chosen.

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Market Equilibrium

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The point where the quantity demanded equals the quantity supplied.

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Elasticity of Demand

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A measure of how much the quantity demanded of a good responds to a change in price.

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Gross Domestic Product (GDP)

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The total value of all goods and services produced within a country in a specific time period.