Explain the Following Basic Terms of Microeconomics Flashcards

Anything from which individuals receive utility or satisfaction

The satisfaction on receives from a good

Anything from which individuals receive disutility or dissatisfaction.

The dissatisfaction one receives from a bad

All natural resources such as minerals, forests, water, and unimproved land.

The physical and mental talents people contribute to the production process

Produced goods that can be used as inputs for further production, such as factories, machinery, tools, computers, and buildings

The particular talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things.

The condition in which our wants are greater than the limited resources available to satisfy those wants.

The science of scarcity; the science of how individuals and societies deal with the fact that wants are greater than the limited resources available to satisfy those wants.

A means for deciding who gets what of available resources and goods.

The most highly valued opportunity or alternative forfeited when a choice is made.

Because of scarcity, there is a need for a rationing device. People will compete for a rationing device. For example, if dollar price is the rationing device, people will compete for dollars.

Because our unlimited wants are greater than our limited resources-that is because scarcity exists-some wants must go unsatisfied. We must choose which wants we will satisfy and which we will not.

Additional benefits. The benefits connected to consuming an additional unit of a good or undertaking one more unit of an activity.