Econ Perspective Exam 1

Front 1

economics

Back 1

the study of how humans deal with the problem of scarcity

Front 2

scarcity

Back 2

an unlimited # of imagined uses for a limited quantity of resources

Front 3

recognition

Back 3

Hegel's explanation for the human need to be appreciated and understood by others *provides the basis for scarcity

Front 4

economic efficiency

Back 4

a measure of how well scarce resources are managed

Front 5

allocative efficiency

Back 5

using scarce resources to provide the most-wanted goods and services

Front 6

productive efficiency

Back 6

using least-cost production methods and carefully managing scarce resources in production

Front 7

Pareto Improvement

Back 7

someone is made better off without harming anyone else

Front 8

institution

Back 8

set of humanly derived constraints that structure human interaction

Front 9

institutional efficiency

Back 9

measure of how well an institution manages uncertainty

Front 10

uncertainty

Back 10

a lack of knowledge about the future

Front 11

symbolic artifact

Back 11

a means of preserving thought

Front 12

absolute advantage

Back 12

the production of a good or service by the person who is most qualified, skilled or competent to produce that output

Front 13

comparative advantage

Back 13

production or service by the person who is least-cost producer

Front 14

self-sufficiency

Back 14

individual produces everything he/she consumes

Front 15

specialization

Back 15

an individual produces only some of what he/she consumes

Front 16

trade

Back 16

exchange of goods and services

Front 17

market

Back 17

institution that facilitates trade

Front 18

competition

Back 18

result of individuals seeking to maximize personal welfare in markets

Front 19

conflict

Back 19

result of individuals seeking to maximize personal welfare in unconstrained environment

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Prisoner's Dilemma

Back 20

description of consequences of conflict

Front 21

Iterated Prisoner's Dilemma

Back 21

when individuals have continuous association with one another

Front 22

reciprocity

Back 22

treating another as that individual treats you

Front 23

C-D gap

Back 23

difference between an organism's ability to make a judgment and the difficulty of the decision environment

Front 24

reliability ratio

Back 24

ratio of probability of making a right decision to probability of making a wrong one

Front 25

tolerance limit

Back 25

ratio of expected value of loss to expected value of gain

Front 26

independent judgment

Back 26

decision, not an instinctive or intuitive response

Front 27

efficiency landscape

Back 27

method of describing ability of an institution to manage uncertainty

Front 28

institutional attribute

Back 28

characteristic for an institution that individuals value for reasons in addition to its ability to manage uncertainty

Front 29

local optimum

Back 29

peak on the efficiency landscape

Front 30

global optimum

Back 30

highest point on an epistatic efficiency landscape

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epistasis

Back 31

interaction of attributes on an efficiency landscape

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diversity

Back 32

individuals within population possess different characteristics that influence their sensitivity to conditions of uncertainty

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gradualism

Back 33

method of climbing an efficiency landscape with incremental steps

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long jump

Back 34

dramatic shift from one peak to another on an efficiency landscape

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transition bridge

Back 35

a means to conceptualize a long jump such as industrial revolution

Front 36

informal institutions

Back 36

norms, conventions and traditions based upon morality of population

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formal institutions

Back 37

laws, regulations, rules and codified standards derived from informal institutions

Front 38

utilitariansim

Back 38

political and economic philosophy based on premise that the best society is one with the maximum average welfare

Front 39

difference principle

Back 39

political and economic philosophy based on premise that the best society is one that maximizes welfare of least advantaged individual

Front 40

risk preference function

Back 40

function shows combo of institutional attributes that provide a given level of value in an uncertain environment

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Lorenz curve

Back 41

graph shows the distribution of income in a society

Front 42

Gini coefficient

Back 42

measure of income equality derived from Lorenz curve

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just adaptation

Back 43

efficient institutional adaptation is just if the value after the change for every rpf is equal or higher than before

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strong condition for just society

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a local optimum reached by series of just adaptations

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weak condition for just society

Back 45

any point on efficiency landscape reached by series of just adaptations

Front 46

unlimited democracy

Back 46

majority can continually alter distribution of rights

Front 47

limited democracy

Back 47

majority is constrained in its ability to alter distribution of rights

Front 48

deterministic uncertainty

Back 48

uncertainty that results from a known process

Front 49

stochastic uncertainty

Back 49

uncertainty that results from empirical variation