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24 Cards in this Set

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  • Back
ECONOMICS
THE STUDY OF THE CHOICES THAT INDIVIDUALS MAKE GIVEN THE PRESENCE OF SCARCITY.
SCARCITY
LIMITED RESOURCES BUT UNLIMITED WANTS.
6 TYPES OF RESOURCES
1.LAND
2.NONHUMAN ANIMAL RESOURCES
3.LABOR
4.CAPTIAL
5.TECHNOLOGY
6.ENTREPRENEURIAL ABILITY
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
WHAT THREE THINGS WILL THE ECONOMY DETERMINE ANSWERS TO?
1. WHAT AND HOW MUCH TO PRODUCE
2. HOW TO PRODUCE IT
3. FOR WHOM TO PRODUCT IT
ECONOMIZING
GETTING THE MAXIMUM BENEFIT AT THE MINIMUM COST
SUNK COST
A COST YOU CAN NOT GET BACK SO IT IS NOT RELEVENT
T/F
IF MARGINAL BENEFIT EXCEEDS MARGINAL COST, THEN DON'T DO IT.
FALSE. DO IT.
T/F
WE WILL DO THINGS UNTIL THE MB=MC
TRUE
INITIAL ENDOWMENT
WHAT WE'RE BORN WITH; CAN IMPROVE BY EXERCISING OR STUDYING.
WHAT IS MARGINAL ANALYSIS BASED ON?
ADDITIONAL COST AND BENEFITS
COMMODITIES
ECONOMIC GOODS AND SERVICES
WE ARE ______ DECISION MAKERS
RATIONAL
THE INVISIBLE HAND
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.
POSTIVE STATEMENT
A STATEMENT THAT CAN BE TESTED, PROVEN OR DISPROVEN

Positive Economics allows us to study the facts about how the economy works.
NORMATIVE STATEMENT
STATEMENT OF OPINION; OUGHT SHOULD GOOD BAD

Normative Economics used to identify problems and prescribe solutions
THE ART OF ECONOMICS
TO APPLY THE KNOWLEDGE FROM POSITIVE ECONOMICS TO NORMATIVE
OPPORTUNITY COST
THE BENEFIT LOST BY UNDERTAKING THE ACTIVITY.
ECONOMIC FORCES
THE NECESSARY REACTIONS TO SCARCITY.
MARKET FORCE
AN ECONOMIC FORCE THAT IS GIVEN FREE REIN BY SOCIETY TO WORK THROUGH THE MARKET
EFFICIENCY
ACHIEVING A GOAL AS CHEAPLY AS POSSIBLE
MICROECONOMICS
THE STUDY OF INDIVIDUAL CHOICE AND HOW ITS INFLUENCED BY ECONOMIC FORCES
MACROECONOMICS
THE STUDY OF THE ECONOMY AS A WHOLE
ECONOMIC POLICIES
ACTIONS TAKEN BY GOVERNMENT TO INFLUENCE ECONOMIC INACTION.