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19 Cards in this Set
- Front
- Back
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What does the economic prespective streses?
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Resource scarcity & necessity of making choices, assumption of rational behavior, and comparisons of marginal benefit and cost.
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Economic Goals
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Economic Growth, Full Employment, Economic efficiency, price level stability, economic freedom, equitable distribution of income, economic security, balance of trade
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Thoeretical Economics
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Involves formulating theories and using them to understand and explain economic behavior & the economy
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Policy Economics
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Using the theories to fix economic problems or promote economic goals.
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Macroeconomics
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examines either the economy as a whole or its basic subdivisions, such as household, government, and business
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Microeconomics
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looks at specific economic units and its details
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tradeoffs
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to achieve one we must sacrifice another
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Positive economics
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Focuses on facts and cause and effect relationships (theoretical economics)"What is"
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Normative Economics
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incorporates value judgements about what the economy should be like or what policies should be recommended ( Policy economics)"What ought to be"
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Fallacy of Composition
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Assumption that what is true for one person is true for a group of people or the whole.
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Economic Policy
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State the goals, determine the policy options, and implement and evaluate the policy that was selected.
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Generalizations
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Economic theories, laws, principles or models
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Abstractions
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simplifications that omit irrelevant facts and circumstances
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Ceteris Paribus
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other things-equal assumption. They assume all other variables except those under immediate consideration are held constant.
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Direct relationship
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(positive relationship) two variables -consumption and income-change in the same direction
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Inverse relationship
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(Negative relationship) two variables change in opposite directions
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Independent variable
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Cause or the source
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Dependent variable
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the effect of the outcome
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Y=A+ bx
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y= dependent variable
a=vertical intercept b=slope of the line x=independent variable |
