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24 Cards in this Set
- Front
- Back
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ECONOMICS
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THE STUDY OF THE CHOICES THAT INDIVIDUALS MAKE GIVEN THE PRESENCE OF SCARCITY.
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SCARCITY
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LIMITED RESOURCES BUT UNLIMITED WANTS.
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6 TYPES OF RESOURCES
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1.LAND
2.NONHUMAN ANIMAL RESOURCES 3.LABOR 4.CAPTIAL 5.TECHNOLOGY 6.ENTREPRENEURIAL ABILITY |
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1. WATER
2. COWS 3. CASH REGISTER 4. OIL 5. KNOWLEDGE 6. AIR 7. FACTORIES |
1. LAND
2. NONHUMAN ANIMAL RESOURCES 3. CAPITAL 4. LAND 5. ENTREPRENEURIAL ABILITY 6. LAND 7. CAPITAL |
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WHAT THREE THINGS WILL THE ECONOMY DETERMINE ANSWERS TO?
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1. WHAT AND HOW MUCH TO PRODUCE
2. HOW TO PRODUCE IT 3. FOR WHOM TO PRODUCT IT |
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ECONOMIZING
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GETTING THE MAXIMUM BENEFIT AT THE MINIMUM COST
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SUNK COST
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A COST YOU CAN NOT GET BACK SO IT IS NOT RELEVENT
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T/F
IF MARGINAL BENEFIT EXCEEDS MARGINAL COST, THEN DON'T DO IT. |
FALSE. DO IT.
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T/F
WE WILL DO THINGS UNTIL THE MB=MC |
TRUE
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INITIAL ENDOWMENT
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WHAT WE'RE BORN WITH; CAN IMPROVE BY EXERCISING OR STUDYING.
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WHAT IS MARGINAL ANALYSIS BASED ON?
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ADDITIONAL COST AND BENEFITS
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COMMODITIES
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ECONOMIC GOODS AND SERVICES
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WE ARE ______ DECISION MAKERS
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RATIONAL
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THE INVISIBLE HAND
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PRICE MECHANISM
SCARCITY CREATES ECONOMIC FORCES, WHICH W/O HINDRANCE BECOME MARKET FORCES. MARKET FORCES RATION BY CHANGING THE PRICE. TOO MUCH OF THE GOOD, PRICE FALLS, NOT ENOUGH, PRICE INCREASES. |
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POSTIVE STATEMENT
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A STATEMENT THAT CAN BE TESTED, PROVEN OR DISPROVEN
Positive Economics allows us to study the facts about how the economy works. |
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NORMATIVE STATEMENT
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STATEMENT OF OPINION; OUGHT SHOULD GOOD BAD
Normative Economics used to identify problems and prescribe solutions |
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THE ART OF ECONOMICS
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TO APPLY THE KNOWLEDGE FROM POSITIVE ECONOMICS TO NORMATIVE
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OPPORTUNITY COST
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THE BENEFIT LOST BY UNDERTAKING THE ACTIVITY.
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ECONOMIC FORCES
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THE NECESSARY REACTIONS TO SCARCITY.
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MARKET FORCE
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AN ECONOMIC FORCE THAT IS GIVEN FREE REIN BY SOCIETY TO WORK THROUGH THE MARKET
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EFFICIENCY
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ACHIEVING A GOAL AS CHEAPLY AS POSSIBLE
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MICROECONOMICS
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THE STUDY OF INDIVIDUAL CHOICE AND HOW ITS INFLUENCED BY ECONOMIC FORCES
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MACROECONOMICS
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THE STUDY OF THE ECONOMY AS A WHOLE
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ECONOMIC POLICIES
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ACTIONS TAKEN BY GOVERNMENT TO INFLUENCE ECONOMIC INACTION.
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