Module 1 Key Terms

The branch of economic analysis that makes prescriptions about the way the economy should work.

• Positive Economics

• Normative Economics

• Microeconomics

• Macroeconomics

The branch of economic analysis that describes the way the economy actually works.

• Positive economics

• Normative economics

• Opportunity cost

• Scarcity

Economic measures that summarize data across many different markets.

• Supply aggregates

• Normative economics

• Economic aggregates

• Demand aggregates

The branch of economics that is concerned with the overall ups and downs of the economy.

• Market economy

• Microeconomics

• Economics

• Macroeconomics

The branch of economics that studies how individuals, households, and firms make decisions and how those decisions interact.

• Macroeconomics

• Economics

• Microeconomics

• Opportunity cost

the real cost of an item: the value of the next best alternative that you must give up in order to get that item.

• Scarce

• Opportunity cost

• Capital

• Resource

In short supply; when a resource is not available in sufficient quantities to satisfy all the various ways a society wants to use it.

• Land

• Capital

• Opportunity cost

• Scarce

The efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes.

• Entrepreneurship

• Opportunity cost

• Capital

• Opportunity cost

Manufactured goods used to make other goods and services

• Land

• Capital

• Labor

• Scarce

The effort of workers.

• Opportunity cost

• Land

• Employment

• Labor