Unit 1 -- Microeconomics -- Vocabulary

Unlimited wants vs. Finite resources

• Economics
• Traditional Economy
• Market Surplus
• Incentive

How are finite resources allocated when there are so many competing desires? (Big Picture)

• Macroeconomics
• Mixed Economy
• Market Shortage
• Profit

How do we make decisions about what to do with our own finite resources (time, money)? (Small Pieces)

• Microeconomics
• Command Economy
• Price ceilings
• Monopoly

The value of your next best alternative.

• Opportunity Cost
• Market Economy
• Price floors
• Oligarchy

a little more or a little less

• Marginal
• LAW OF DEMAND:
• Elastic
• Economics

Past costs that are irrelevant to decision making.

• Sunk costs
• Demand Curve Shifts
• Inelastic
• Macroeconomics

An economic system based on customs, traditions, and beliefs.

• Traditional Economy
• LAW OF SUPPLY:
• Incentive
• Microeconomics

An economy that combines elements of market, command, and traditional economies.

• Mixed Economy
• EQUILIBRIUM
• Profit
• Opportunity Cost

A central authority (government) has to answer the big three questions

• Command Economy
• Market Surplus
• Monopoly
• Marginal

System that relies on choices made by consumers

• Market Economy
• Market Shortage
• Oligarchy
• Sunk costs