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