Econ Chapter 1

Front 1

Natural Resources

Back 1

The land, water, metals, animals and other gifts of nature that are available for producing goods and services.

Front 2

Scarcity

Back 2

the perpetual state of insufficiency of resources to satisfy people's unlimited wants

Front 3

Economics

Back 3

the study of how people transform resources into goods and services to satisfy want and need

Front 4

Consumer Sovereignty

Back 4

the ability for consumers (us) to exercise complete control over what goods and services are produced by the economy

Front 5

Econ. Model

Back 5

An abstraction of economic reality. it can be expressed pictorially graphically algebraically or in words

Front 6

Ceteris Paribus

Back 6

"everything else being equal"

Front 7

Circular flow model

Back 7

model chart of the relationships produced by the economy. relationships between households and firms

Front 8

Household

Back 8

an econ. unit of one or more persons living under one roof that has a source of income and uses it how it may seem fit

Front 9

Firm

Back 9

an econ unit that produces goods and services in the expectation of selling them to households.

Front 10

microeconomics

Back 10

a subarea of econ. that analyzes individuals as consumers and producers and specific firms and industries. focuses on the market behavior of firms and households

Front 11

macroeconomics

Back 11

a subarea of economics that analyzes the behavior of the economy as a whole.

Front 12

Positive economics

Back 12

a subset of econ. that analyzes the way the economy actually opperates

Front 13

Normative Econ.

Back 13

a subset of econ. founded on value judgements and leading to assertions of what ought to be

Front 14

Invisible Hand

Back 14

guides firms that seek only to satisfy their own self interest to produce precisely those goods and services that consumers want.

Front 15

Econometrics

Back 15

the use of statistics to quantify and test econ models