Ap Macroeconomics Chapter 1

Lack of enough resources to satisfy desired uses of those resources

resource inputs used to produce goods and services such as land, labor, and capital, and entrenpreneurship

Final goods produced for use in the production of other goods, e.g., equipment, structures.

The assembling of resources to produce new or improved products and technologies.

The study of how best to allocate scarce resources among competing uses.

The most desired goods or services that are forgone in order to obtain some thing else.

The alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology

Maximum output of a good from the resources used in production

An increase in output (real GDP); an expansion of production possibilities

The use of market prices and sales to signal desired outputs (or resource allocations).

The doctrine of “leave it alone,” of nonintervention by government in the market mechanism.

An economy that uses both market signals and government directives to allocate goods and resources

An imperfection in the market mechanism that prevents optimal outcomes

Government intervention that fails to improve economic outcomes.

The study of aggregate economic behavior, of the economy as a whole.

The granting of small (“micro”), unsecured loans to small business and entrepreneurs.

The assumption of nothing else changing.