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23 Cards in this Set

  • Front
  • Back
ceteris paribus
A device used to analyze the relationship between two variables while the values of other variables are held unchanged. (All Else Equal)
descriptive economics
The compilation of data that describe phenomena and facts.
economic growth
An increase in the total output of an economy.
economic theory
A statement or set of related statements about cause and effect, action and reaction.
The study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided.
An efficient economy is one that produces what people want at the least possible cost. (Allocative efficiency)
efficient market
A market in which profit opportunities are eliminated almost instantaneously.
empirical economics
Collection and use of data to test economic theories.
fallacy of composition
Erroneous belief that what is true for a part is true for the whole.
The branch of economics that examines the economic behavior of aggregates - income, employment, output, and so on - on a national scale.
The process of analyzing the additional or incremental costs or benefits arising from a coice or decision.
Branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units - that is, business firms and households.
Formal statement of theory, usually a mathematical statement of a presumed relationship between two or more variables.
normative economics
An approach to economics that analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action. Also called policy economics.
Ockham's razor
The principle that irrelevant detail should be cut away.
opportunity cost
The best alternative that we forgo, or give up, when we make a choice or a decision.
positive economics
An approach to economics that seeks to understand behavior and the operation of systems without making judgments. It describes what exists and how it works.
post hoc, ergo propter hoc
"After this (in time), therefore because of this" - Common error made in thinking about causation.
sunk costs
Costs that can not be avoided, regardless of what is done in the future, because they have already been incurred.
A measure that can change from time to time or from observation to observation.