{"id":5046,"date":"2016-07-20T21:05:57","date_gmt":"2016-07-20T21:05:57","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/microeconomics\/?post_type=chapter&p=5046"},"modified":"2016-07-20T21:05:57","modified_gmt":"2016-07-20T21:05:57","slug":"glossary-economic-thinking","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/chapter\/glossary-economic-thinking\/","title":{"raw":"Glossary: Economic Thinking","rendered":"Glossary: Economic Thinking"},"content":{"raw":"

circular flow diagram<\/strong> a diagram indicating that the economy consists of households and firms interacting in a goods-and-services market and a labor market<\/p>\n

direct relationship<\/strong> a relationship between two variables such that both either increase or decrease together; also called a \u201cpositive relationship\u201d<\/em><\/p>\n

division of labor<\/strong> the way in which the work required to produce a good or service is divided into tasks performed by different workers<\/p>\n

economic model<\/strong> is a simplified version of reality that allows us to observe, understand, and make predictions about economic behavior<\/p>\n

economics<\/strong> is the study of how humans make choices under conditions of scarcity in an attempt to satisfy their unlimited wants<\/p>\n

economies of scale<\/strong> when the average cost of producing each individual unit declines as total output increases<\/p>\nfunction<\/strong> a relationship or expression involving one or more variables\n

goods-and-services market<\/strong> a market in which firms are sellers of what they produce, and households are buyers<\/p>\n

independent relationship<\/strong> a relationship between two independent variables such that when one changes, the other does not change, and vice versa; also called a \u201cconstant relationship\u201d<\/em><\/p>\nintercept<\/strong> the point on a graph where a line crosses the vertical axis or horizontal axis\n\ninterception point<\/strong> the point on a graph where two lines cross\n

inverse relationship<\/strong> a relationship between two variables such that when one increases, the other decreases, or vice versa; also called \u201cnegative relationship\u201d<\/em><\/p>\n

labor market<\/strong> the market in which households sell their labor as workers to businesses or other employers<\/p>\n

macroeconomics<\/strong> the branch of economics that focuses on broad issues such as growth, unemployment, inflation, and trade balance<\/p>\n

microeconomics<\/strong> the branch of economics that focuses on actions of particular agents within the economy, like households, workers, and businesses<\/p>\n

monetary policy<\/strong> policy that involves altering the level of interest rates, the availability of credit in the economy, and the extent of borrowing<\/p>\n

negative slope<\/strong> indicates that two variables are negatively related; when one variable increases, the other decreases, and when one variable decreases, the other increases<\/p>\nopportunity cost<\/strong> is the value of the next best alternative\n

positive slope<\/strong> indicates that two variables are positively related; when one variable increases, so does the other, and when one variable decreases, the other also decreases<\/p>\n

productive resources<\/b> the inputs used in the production of goods and services to make a profit: land, economic capital, labor, and entrepreneurship;\u00a0also called \"factors of production\"<\/em><\/p>\n

scarcity<\/strong>\u00a0exists when human wants for goods and services exceed the available supply<\/p>\nslope<\/strong> the change in the vertical axis divided by the change in the horizontal axis\n

slope of zero<\/strong> indicates that there is a constant relationship between two variables: when one variable changes, the other does not change<\/p>\n

specialization<\/strong> when workers or firms focus on particular tasks for which they are well suited within the overall production process<\/p>\nvariable<\/strong> a quantity that can assume a range of values\n\nx-axis<\/strong> the horizontal line on a graph\n\ny-axis<\/strong> the vertical line on a graph","rendered":"

circular flow diagram<\/strong> a diagram indicating that the economy consists of households and firms interacting in a goods-and-services market and a labor market<\/p>\n

direct relationship<\/strong> a relationship between two variables such that both either increase or decrease together; also called a \u201cpositive relationship\u201d<\/em><\/p>\n

division of labor<\/strong> the way in which the work required to produce a good or service is divided into tasks performed by different workers<\/p>\n

economic model<\/strong> is a simplified version of reality that allows us to observe, understand, and make predictions about economic behavior<\/p>\n

economics<\/strong> is the study of how humans make choices under conditions of scarcity in an attempt to satisfy their unlimited wants<\/p>\n

economies of scale<\/strong> when the average cost of producing each individual unit declines as total output increases<\/p>\n

function<\/strong> a relationship or expression involving one or more variables<\/p>\n

goods-and-services market<\/strong> a market in which firms are sellers of what they produce, and households are buyers<\/p>\n

independent relationship<\/strong> a relationship between two independent variables such that when one changes, the other does not change, and vice versa; also called a \u201cconstant relationship\u201d<\/em><\/p>\n

intercept<\/strong> the point on a graph where a line crosses the vertical axis or horizontal axis<\/p>\n

interception point<\/strong> the point on a graph where two lines cross<\/p>\n

inverse relationship<\/strong> a relationship between two variables such that when one increases, the other decreases, or vice versa; also called \u201cnegative relationship\u201d<\/em><\/p>\n

labor market<\/strong> the market in which households sell their labor as workers to businesses or other employers<\/p>\n

macroeconomics<\/strong> the branch of economics that focuses on broad issues such as growth, unemployment, inflation, and trade balance<\/p>\n

microeconomics<\/strong> the branch of economics that focuses on actions of particular agents within the economy, like households, workers, and businesses<\/p>\n

monetary policy<\/strong> policy that involves altering the level of interest rates, the availability of credit in the economy, and the extent of borrowing<\/p>\n

negative slope<\/strong> indicates that two variables are negatively related; when one variable increases, the other decreases, and when one variable decreases, the other increases<\/p>\n

opportunity cost<\/strong> is the value of the next best alternative<\/p>\n

positive slope<\/strong> indicates that two variables are positively related; when one variable increases, so does the other, and when one variable decreases, the other also decreases<\/p>\n

productive resources<\/b> the inputs used in the production of goods and services to make a profit: land, economic capital, labor, and entrepreneurship;\u00a0also called “factors of production”<\/em><\/p>\n

scarcity<\/strong>\u00a0exists when human wants for goods and services exceed the available supply<\/p>\n

slope<\/strong> the change in the vertical axis divided by the change in the horizontal axis<\/p>\n

slope of zero<\/strong> indicates that there is a constant relationship between two variables: when one variable changes, the other does not change<\/p>\n

specialization<\/strong> when workers or firms focus on particular tasks for which they are well suited within the overall production process<\/p>\n

variable<\/strong> a quantity that can assume a range of values<\/p>\n

x-axis<\/strong> the horizontal line on a graph<\/p>\n

y-axis<\/strong> the vertical line on a graph<\/p>\n\n\t\t\t

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Candela Citations<\/h3>\n\t\t\t\t\t
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