(See related pages)
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| aggregate | A collection of specific economic units treated as if they were one unit. (See page(s) p. 7) |
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| budget line | A schedule or curve that shows various combinations of two products a consumer can purchase with a specific money income. (See page(s) p. 10) |
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| capital | Human-made resources (buildings, machinery, and equipment) used to produce goods and services. (See page(s) p. 12) |
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| capital goods | Goods that do not directly satisfy human wants. (See page(s) p. 13) |
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| consumer goods | Products and services that satisfy human wants directly. (See page(s) p. 13) |
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| economic growth | (1) An outward shift in the production possibilities curve that results from an increase in factor supplies or quality or an improvement in technology; (2) an increase either in real output (gross domestic product) or in real output per capita. (See page(s) p. 18) |
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| economic perspective | A viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions. (See page(s) p.4) |
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| economic principle | A statement about economic behaviour or the economy that enables prediction of the probable effects of certain actions. (See page(s) p. 7) |
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| economic resources | The land, labour, capital, and entrepreneurial ability that are used in the production of goods and services. (See page(s) p. 12) |
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| economics | The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity. (See page(s) p. 3) |
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| entrepreneurial ability | The human talents that combine the other resources to produce a product, make nonroutine decisions, innovate, and bear risks. (See page(s) p. 12) |
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| factors of production | Economic resources: land, capital, labour, and entrepreneurial ability. (See page(s) p. 13) |
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| investment | Spending for the production and accumulation of capital and additions to inventories. (See page(s) p. 12) |
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| labour | The physical and mental talents and efforts of people that are used to produce goods and services. (See page(s) p. 12) |
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| land | Natural resources ("free gifts of nature") used to produce goods and services. (See page(s) p. 12) |
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| law of increasing opportunity costs | As the production of a good increases, the opportunity cost of producing an additional unit rises. (See page(s) p. 14) |
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| macroeconomics | The part of economics concerned with the economy as a whole; with such major aggregates as the household, business, and governmental sectors; and with measures of the total economy. (See page(s) p. 7) |
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| marginal analysis | The comparison or marginal ("extra" or "additional") benefits and marginal costs, usually for decision making. (See page(s) p. 5) |
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| microeconomics | The part of economics concerned with such individual units as industries, firms, and households; and with individual markets, particular prices, and specific goods and services. (See page(s) p. 8) |
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| normative economics | The part of economics involving value judgments about what the economy should be like; concerned with which economic goals and policies should be implemented. (See page(s) p. 8) |
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| opportunity cost | The amount of other products that must be forgone or sacrificed to produce a unit of a product. (See page(s) p. 4) |
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| other-things-equal assumption | The assumption that factors other than those being considered are held constant. (See page(s) p. 7) |
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| positive economics | The analysis of facts or data to establish scientific generalizations about economic behaviour. (See page(s) p. 8) |
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| production possibilities curve | A curve showing the different combinations of two goods or services that can be produced in a full-employment, full-production economy where the available supplies of resources and technology are fixed. (See page(s) p. 14) |
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| scientific method | The systematic pursuit of knowledge through the formulation of a problem, collection of data, and the formulation and testing of hypotheses to obtain theories, principles, and laws. (See page(s) p. 6) |
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| utility | The want-satisfying power of a good or service; the satisfaction a person gets from consuming a good or service. (See page(s) p. 4) |