Econ Vocb. Ch 1-5

Front 1

Economics

Back 1

-The study of scarcity

-The study of unlimited wants and limited resources.

Front 2

Scarcity

Back 2

-implys that society has unlimited wants and limited resources.

Front 3

Scarce Goods

Back 3

Something....
(money,time,almosteverything)
must be given up to obtain it. (Clean air is NOT scarce)

Front 4

Opportunity Cost (O.C)

Back 4

*What you give up to get that item*--Highest value foregone alternitive..*

Front 5

Positive Statements

Back 5

Has to do with what IS...
(FACTS not opinions)
Can it be proven true OR false

Front 6

Normative Statements

Back 6

Have to do with what SHOULD be.

Front 7

How do we make positive statements in economics?

Back 7

Models or Theories

Front 8

Supply and Demand graphs are what type of diagrams?

Back 8

L(X) diagrams

Front 9

4 Properties of models

Back 9

1) Simple (Answer the ?)
2) General
3) Useful in Predicting
4) Testable

Front 10

PPF-Production Possibilities Frontier

Back 10

A graph that shows the various combinations of output that the economy can possibly produce.
(Always in units of other goods)

Front 11

Absolute Advantage

Back 11

Ability to produce MORE of a good

Front 12

Comparative Advantage

Back 12

Low opportunity cost producer.
(Who gives up less of another good to produce good X has less O.C)-Produce more-

Front 13

Gains from Trade

Back 13

Trade enables specialization in what we have a comparative advantage in producing.

Front 14

Complete specialization

Back 14

Comsumption does NOT equal production.

Front 15

Bowing of a graph

Back 15

Due to increasing opportunity cost.