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16 Cards in this Set
- Front
- Back
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Scarcity
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limited number of resources (land, labor, capital) with unlimited wants
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Economics
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the study of how society manages scarce resources
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Positive vs. Normative
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Positive- says how the world "is" (facts, descriptive)
Normative- says how the world "should be" (opinions, prescriptive) |
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Microeconomics vs. Macroeconomics
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Micro- focus on individual units within the economy (households, businesses)
Macro- focus on behavior of economy as a whole |
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Factors of production
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Land, Labor, Capital (machines, equipment and shit)
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3 basic questions of an economy
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1) What? 2) How? 3) For whom?
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Economic system
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How the 3 basic questions of economy are answered
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Market economy
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people make own choices based on prices (rationing tool?)
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Central planning
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Government makes all the economy choices, but has problems allocating so many resources by themselves
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Ceteris paribus
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"holding all other factors constant"
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association
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2 events occuring at about the same time
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causation
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one variable causes the other to occur
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false causality
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you think event X causes event Y, but they are actually just associated
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reverse causality
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you think X causes Y, but actually Y causes X
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omitted variable
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you think X causes Y, but actually X causes Z, which causes Y
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Graph: What does X and Y axis represent respectively?
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X axis- independant variable
Y axis- dependent variable |
