Macro test 1_1

Macro test 1_1 - Term Definition substitute good positive...

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Term: substitute good Definition: positive relationship. decreases in the price of one good decreases demand for the other good. ex tea and coffee Term: complement good Definition: negative relationship, decrease in price for one good increases the demand for the other good. ex peanut butter and jelly Term: Opportunity cost Definition: what you give up to get what u want Term: capital Definition: building and machines used in production process Term: Normal Good Definition: goods which demand increases when income increases and falls when income decreases, when price is constant
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Term: Inferior Good Definition: good that decreases in demand when income increases, increase in demand when income decreases Term: Fallacy of false cause Definition: When you think event A causes event B just b/c it precedes it Term: Fallacy of division Definition: When you think whats good for the whole is good for the part Term: competition Definition: guardian of capitalism Term: privately owned Definition: you have motivation to keep factors of production as efficient as possible
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Term: capitalism Definition: economic system where factors of production are privately owned and operated for personal gain, in competitive atmosphere Term: law of increasing cost Definition: when you increase production of one good then you sacrifice greater and greater amount of the alternative good Term: production possibility frontier Definition: graph showing any point in time the production of your company Term:
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