Richard cost for Timmy was the house. 8.

Richard Nguyen

Economic
Vocabulary Terms

 

1.     Basic Economic Problem

A)   Definition:
Scarcity of resources. It is the theory of customers having unlimited demands when
resources are limited thus raising the question about the product such as when,
how and why to produce. 

“The Basic
Economic Problem.” UKEssays,
www.ukessays.com/essays/economics/what-is-the-basic-economic-problem-economics-essay.php.

B)   Example: Apple
has to solve their Basic Economic
Problem in order to satisfy their customers

 

2.     Scarcity

A)   Definition:
The gap of limited resources to unlimited wants; shortage of supply.

Staff,
Investopedia. “Scarcity.” Investopedia, 15 Jan. 2016, www.investopedia.com/terms/s/scarcity.asp.

B)  
Example:
The amount of clean drinking water poses a problem of scarcity

 

3.    
Economic Welfare

A)  
The
measurement of success and living standards in an economy that is commonly
determined by the country’s GDP, literacy and various economic factors.

Pettinger, Tejvan. “Economic
Welfare.” Economics Help, www.economicshelp.org/blog/1041/economics/economic-welfare/.

B)  
The Economic Welfare in America is very
successful due to their high GDP

 

4.    
Allocative Mechanism

A)  
A
guide of questions to solve the basic economic problems posed to a business and
others. Questions may vary but many people commonly refer to this guide: What
to produce? How to produce? For whom to produce to?

Amir. “Different allocative
mechanisms.” Economics Guide, 20 Feb. 2016, www.economicsguide.me/?page_id=1635.

B)  
Example:
Many companies use various allocative
mechanisms to solve their basic economic problems

 

5.    
Real
Income

A)  
The amount of money one now has
after taking factors such as inflation into consideration thus affecting one’s
purchasing power.

Staff, Investopedia. “Real
Income.” Investopedia, 24 Jan. 2018,
www.investopedia.com/terms/r/realincome.asp.

B)  
Example: Richard’s expenses were
increasing while the amount of money he made did not thus his real income was not stable enough for
his purchasing power and could not adapt to inflation.

 

 

 

6.    
Real
GDP

A)  
A measurement of the nominal total economic
outputs in which inflation or deflation has been taken into consideration.

Also, a representation of the value of all goods services in an economy after
adjusted by inflation.

Staff, Investopedia. “Real
Gross Domestic Product (GDP).” Investopedia, 3 Oct. 2014, www.investopedia.com/terms/r/realgdp.asp.

 

B)  
Example: The Real GDP in China has currently shown an increase compared to their
nominal GDP previous years

 

7.    
Opportunity
Cost

A)  
The benefit one has to sacrifice for
them to be able to obtain another desirable action.

Staff, Investopedia.

“Opportunity Cost.” Investopedia, 9 Sept. 2017, www.investopedia.com/terms/o/opportunitycost.asp.

B)  
Example:
Timmy decided to buy a lifetime supple of cookies with his lifesavings instead
of a house thus the opportunity cost
for Timmy was the house.

 

8.    
Micro-Economics

A)  
The
branch of social studies pertaining to individuals and industries in which a
relationship is formed between the two, for example.

Staff, Investopedia.

“Microeconomics.” Investopedia, 11 Sept. 2014,
www.investopedia.com/terms/m/microeconomics.asp.

B)  
Example:
Timmy was concerned about the price of the cookies he purchased, in which is a
concern of micro-economics

 

9.    
Macro-Economics

A)  
The
study of an entire economy (Large scale or general economy). Changes in a
country’s economy or global market, for example.

“Definition of Macroeconomics
| What is Macroeconomics ? Macroeconomics Meaning.” The Economic Times, economictimes.indiatimes.com/definition/macroeconomics.

 

B)  
Example:
Timmy is concerned about the inflation in the United States as it may affect
his Real Income, in which is a concern of macro-economics.