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23 Cards in this Set
- Front
- Back
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ceteris paribus
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A device used to analyze the relationship between two variables while the values of other variables are held unchanged. (All Else Equal)
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descriptive economics
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The compilation of data that describe phenomena and facts.
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economic growth
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An increase in the total output of an economy.
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economic theory
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A statement or set of related statements about cause and effect, action and reaction.
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economics
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The study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided.
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efficiency
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An efficient economy is one that produces what people want at the least possible cost. (Allocative efficiency)
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efficient market
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A market in which profit opportunities are eliminated almost instantaneously.
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empirical economics
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Collection and use of data to test economic theories.
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equity
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Fairness.
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fallacy of composition
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Erroneous belief that what is true for a part is true for the whole.
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macroeconomics
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The branch of economics that examines the economic behavior of aggregates - income, employment, output, and so on - on a national scale.
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marginalism
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The process of analyzing the additional or incremental costs or benefits arising from a coice or decision.
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microeconomics
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Branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units - that is, business firms and households.
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model
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Formal statement of theory, usually a mathematical statement of a presumed relationship between two or more variables.
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normative economics
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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.
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Ockham's razor
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The principle that irrelevant detail should be cut away.
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opportunity cost
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The best alternative that we forgo, or give up, when we make a choice or a decision.
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positive economics
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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.
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post hoc, ergo propter hoc
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"After this (in time), therefore because of this" - Common error made in thinking about causation.
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scarce
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Limited.
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stability
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Condition
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sunk costs
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Costs that can not be avoided, regardless of what is done in the future, because they have already been incurred.
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variable
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A measure that can change from time to time or from observation to observation.
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