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25 Cards in this Set
- Front
- Back
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Scarcity
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the condition in which our wants are greater than the limited resources available to satisfy those wants
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Economics
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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
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Positive economics
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the study of "what is" in economic matters
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Normative economics
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the study of "what should be" in economic matters
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Micoreconomics
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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
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Macroeconomics
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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
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Utility
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a measure of the satisfaction, hapiness, or benefit that results from the consumption of a good
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Good
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anything from which individuals receive utility or satisfaction
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Disutility
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the dissatisfaction one receives from a bad
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Bad
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anything from which individuals recieve disutility or dissatisfaction
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Land
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all natural resources, such as minerals, forests, water, and unimproved land
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Labor
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the physical and mental talents people contribute to the production process
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Capital
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produced goods that can be used as inputs for further production, such as factories, machinery, tools, computers and buildings
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Entrepreneurship
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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
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Rationing device
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a means for deciding who gets what of resources and goods
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Opportuinty cost
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the most highly valued opportunity or alternative forfeited when a choice is made
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Marginal benefits
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additional benefits. the benefit connected to consuming an additional unit of a good or undertaking one more unit of an activity
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Marginal costs
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the change in total cost that results in a change in output
MC = ^TC/^Q |
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Decisions at the margin
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decision making characterized by the additional (marginal) benefits of a change against the addtional (marginal) cost of a change with respect to current conditions
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Efficiency
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exists when marginal benefits equals marginal costs
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Equilibrium
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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
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Ceteris paribus
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a latin term meaning "all other things constant" or "nothing else changes"
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Fallocy of composition
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the errounous view that what is good or true for the individual is necessarily good or true for the group
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Theory
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an abstract representation of the real world designed with the intent to better understand that world
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Abstract
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the process (used in building a theory) of focusing on a limited number of variables to explain or predict an event
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