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17 Cards in this Set

  • Front
  • Back
what is economics
the study of how human beings coordinate their desires and wants, given the decision-making mechanisms, social customs, and political realities of the society.
In the study of economics, coordination refers to....
how three central problems facing any economy are solved.
the three central problems are...
what and how much to produce
how to produce it
for whom to produce it
problem of scarcity
the good avaliable are too few to satify individuals' desires.
two elements of scarcity
our wants
our means of fulfilling those wants
to understand an economy, you need to learn...
Economic reasoning
Economic terminology
Economic insights
Economic institution
Economic policy options
Economic reasoning
Making decisions on basis of costs and benefits
Marginal cost
the additional cost to you over and above the costs you've already incurred.
Sunk cost
costs that have already been incurred and cannot be recovered.
Marginal benefit
the additional benefits above what you've already desired.
There ain't no such thing as a free lunch
opportunity cost of undertaking an activity
the benefit forgone by undertaking that activity
the benefit forgone is
the benefit you might have gained from choosing the next-best alternative.
economic forces are
the necessary reactions to scarcity.
market force is
an economic forces that is given relatively free rein by society to work through the market.
the invisible hand is
the price mechanism, the rise and fall of prices that guides our actions in a market
Economic reality is controlled by ...
economic forces (invisible hand)
social and cultural forces
political and legal forces