ECON 101 - Chapter 1-5 Terms (Excel Sheet)
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Barter, An economic system in which goods and services are traded directly for o
ther goods and services.
Command economy, An economy in which most economic decisions are made by a centr
al planning authority.
Consumption, The act of using goods or services to satisfy wants.
Division of labour, The breaking up of a production process into a series of spe
cialized tasks each done by a different worker.
Economy, A system in which scarce resources are allocated among competing uses.
Factors of production, Resources used to produce goods and services; frequently
divided into the basic categories of land labour and capital.
Free-market economy, An economy in which most economic decisions are made by pri
vate households and firms.
Goods, Tangible commodities such as cars or shoes.
Macroeconomics, The study of the determination of economic aggregates such as to
tal output the price level employment and growth.
Microeconomics, The study of the causes and consequences of the allocation of re
sources as it is affected by the workings of the price system.
Mixed economy, An economy in which some economic decisions are made by firms and
households and some by the government.
Opportunity cost, The cost of using resources for a certain purpose measured by
the benefit given up by not using them in their best alternative use.
Production possibilities boundary, A curve showing which alternative combination
s of commodities can just be attained if all available resources are used effici
ently; it is the boundary between attainable and unattainable output combination
Production, The act of making goods or services.
Resource allocation, The allocation of an economy's scarce resources of land lab
our and capital among alternative uses.
Services, Intangible commodities such as haircuts or medical care.
Specialization of labour, The specialization of individual workers in the produc
tion of particular goods or services.
Traditional economy, An economy in which behavior is based mostly on tradition.
Transnational corporations (TNCs), Firms that have operations in more than one c
ountry. Also called multinational enterprises (MNEs).
Cross-sectional data, A set of observations made at the same time across several
different units (such as households firms or countries).
Economic model, A term used in several related ways: sometimes for an abstractio
n designed to illustrate some point but not designed to generate testable hypoth
eses and sometimes as a synonym for theory.
Endogenous variable, A variable that is explained within a theory. Sometimes cal
led an induced variable or a dependent variable.
Exogenous variable, A variable that is determined outside the theory. Sometimes
called an autonomous variable or an independent variable.
Index number, An average that measures change over time of such variables as the
price level and industrial production; conventionally expressed as a percentage
relative to a base period - which is assigned the value 100.
Normative statement, A statement about what ought to be as opposed to what actua
Positive statement, A statement about what actually is (was or will be) as oppos
ed to what ought to be.
Scatter diagram, A graph of statistical observations of paired values of two var
iables (one measured on the horizontal and the other on the vertical axis). Each
point on the coordinate grid represents the values of the variables for a parti
cular unit of observation.
Time-series data, A set of observations made repeatedly at successive periods of
Variable, Any well-defined item such as the price or quantity of a commodity tha
t can take on various specific values.
Absolute price, The amount of money that must be spent to acquire one unit of a
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