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15 Cards in this Set

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Scarcity
the shortage that exists when less of something is available than is wanted at a zero price
Economic good
any item that is scarce
Free good
a good for which there is no scarcity
Economic Bad
any item for which we would pay to have less
Resources, factors of producition, or inputs
goods used to produce other goods,i.e., LAND, LABOR,& CAPITAL
Land
all natural resources, such as minerals, timber, and water, as well as the land itself
Labor
the physical and intellectual services of people, including the training, education, and abilities of the individual in a society
Capital
products such as machinery and equipment that are used in production
What is Economics?
Economics is the study of how people choose to use their scarce resources to attempte to satisfy their unlimited wants
Rational self-interest
the means by which people choose the options that give them the greatest amount of satisfaction
Positive analysis
Analysis of what is; does not impose the balue judgements of one idividual on the decisions of others
Normative Analysis
Analysis of what ought to be; conclusions based on opinion or value judgements do not advance one's understanding of events.
fallacy of composition
the mistaken assumption that because what applies in the case of one applies to the case of many.
Association as causation
the mistaken assumption that because two events seem to occur together, one causes the other
Micro vs Macro
Micro: the study of economics at the level of the individual.
Macro: the study of the economy as a whole