## Microeconomics Terms

Last update by flaminfury42 on 04/01/2014
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# two variables are said to be correlated if they tend to go up or down together. Correlation need not imply causation

correlation

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• a simplified, small-scale version of some aspect of the economy. Economic models are often expressed in equations, by graphs, or in words
economic model
• something measured by a number; it is used to analyze what happens to other things when the size of that number changes (varies)
variable
• the "0" point in the lower-left corner of a graph where the axes meet is called the origin. Both variables are equal to zero at the origin.
origin (of a graph)
• a straight line that touches, but does not cut, the curve at a particular point.
tangent to a curve
• the point at which it touches the vertical axis (the Y-axis). The X-intercept is defined similarly.
y-intercept
• lines whose y-intercept is zero have so many special uses in economics and other disciplines that they have been given a special name: a ray through the origin, or a ray
Ray through the origin, or ray
• rays through the origin with a slope of 1 are called 45 degree lines because they form an angle of 45 degrees with the horizontal axis. a 45 degree line marks off points where the variables measured on each axis have equal values
45 degree line
• a graph whose axes show the quantities of two inputs thta are used to produce some output. A curve in the graph corresponds to some given quantity of that output, and the different points on that curve show the different quantities of the two inputs that are just enough to produce the given output.
production indifference map
• the labor, machinery, buildings, and natural resources used to make outputs
factors of production, or inputs
• the sum of the money values of all final goods and services produced in the domestic economy and sold on organized markets during a specified period of time usually a year.

gross domestic product
• an economy that trades with other nations in goods and services and perhaps also trades in financial assets

open economy
Microeconomics Terms
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