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20 Cards in this Set
- Front
- Back
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Scientific method |
Objective development and testing of theories |
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Economic Models |
Simplifications of reality based on assumptions |
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Factors of production |
Inputs such as land, labor, and capital |
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Production of possibilities frontier |
A graph that shows the combinations of output the economy can possibly produce given the available factors of production and the available production technology |
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Opportunity cost |
Whatever is given up in order to get something else |
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Efficiency |
Getting maximum output from the resources available |
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Microeconomics |
The study of how households and forms make claw visions and how they interact in markets |
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Macroeconomics |
The study of economy wide phenomena |
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Positive statements |
Descriptions of the world as it is |
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Normative statements |
Prescription for how the world ought to be |
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True or false: if an economy is operating on its production possibilities frontier, it must be using its resources efficiently |
True |
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True or false: if an economy is operating on its production possibilities frontier, it must produce less of one good if it produces more of another |
True |
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True or false: points outside the production possibilities frontier are attainable but inefficient |
False |
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If an economy were experiencing substantial unemployment, the economy is producing inside the production possiblities frontier. |
True |
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True or false: the production possibilities frontier is bowed outward because the trade off between the production of any two goods is constant |
False |
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True or false: an advance in production technology would cause the production possibilities curve to shift outward |
True |
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True or false: macroeconomics is concerned with the study of how households and forms make decisions and how they interact in specific markets |
False |
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True or false: the statement, an increase in inflation a RT f'd to cause unemployment to fall in the short run, is normative |
False |
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True or false: when economist make positive statements, they are more likely to be acting as scientists |
True |
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True or false: normative statements can be refuted with evidence |
False |
