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25 Cards in this Set

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Scarcity
the condition in which our wants are greater than the limited resources available to satisfy those wants
Economics
the science of scarcity; the science of how individuals and societies deal with the fact that wants are greater than limited resources available to satisfy those wants
Positive economics
the study of "what is" in economic matters
Normative economics
the study of "what should be" in economic matters
Micoreconomics
the branch of economics that deals with human behavior and choices as they relate to relatively small units - an individual, a firm, an industry, a single market
Macroeconomics
the branch of economics that deals with human behavior and choices as they relate to highly aggregate markets (such as the goods and services market)or the entire economy
Utility
a measure of the satisfaction, hapiness, or benefit that results from the consumption of a good
Good
anything from which individuals receive utility or satisfaction
Disutility
the dissatisfaction one receives from a bad
Bad
anything from which individuals recieve disutility or dissatisfaction
Land
all natural resources, such as minerals, forests, water, and unimproved land
Labor
the physical and mental talents people contribute to the production process
Capital
produced goods that can be used as inputs for further production, such as factories, machinery, tools, computers and buildings
Entrepreneurship
the particular talent that some people have for orgainizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things
Rationing device
a means for deciding who gets what of resources and goods
Opportuinty cost
the most highly valued opportunity or alternative forfeited when a choice is made
Marginal benefits
additional benefits. the benefit connected to consuming an additional unit of a good or undertaking one more unit of an activity
Marginal costs
the change in total cost that results in a change in output
MC = ^TC/^Q
Decisions at the margin
decision making characterized by the additional (marginal) benefits of a change against the addtional (marginal) cost of a change with respect to current conditions
Efficiency
exists when marginal benefits equals marginal costs
Equilibrium
means "at rest"; it is descriptive of a natural resting place. euilibrium in a market is the price-quantity combination from which there is no tendency for buyers or sellers to move away. Graphically, equilibrium is the intersection of the supply and demand curves
Ceteris paribus
a latin term meaning "all other things constant" or "nothing else changes"
Fallocy of composition
the errounous view that what is good or true for the individual is necessarily good or true for the group
Theory
an abstract representation of the real world designed with the intent to better understand that world
Abstract
the process (used in building a theory) of focusing on a limited number of variables to explain or predict an event