Economics

Front 1

What is coordination

Back 1

refers to how the three central problems facing any economy are solved.

Front 2

What are the three central problems to solve for coordination.

Back 2

1. What, and how much, to produce.
2. How to produce it.
3. For whom to produce it.

Front 3

Define SCARCITY.

Back 3

The goods available are too few to satisfy indiviuals desires.

Front 4

What are the two elements of scarcity.

Back 4

Our wants and our means of fulfilling those wants.

Front 5

How does an economy deal with scarcity?

Back 5

Coercion. limiting peoples wants and increasing the amount of work individuals are willing to do to fulfill those wants.

Front 6

Define DEDUCTION-

Back 6

a method of reasoning in which one deduces a theory based on a set of almost self-evident principles.

Front 7

Define INDUCTION-

Back 7

a method of reasoning in which one develops general principles by looking for patterns in the data.

Front 8

Why has INDUCTION become more important in modern economics?

Back 8

computing technology has improved, lowering the cost of using inductive methods.

Front 9

What is economic reasoning?

Back 9

making decisions on the basis of costs and benefits.

Front 10

Define MARGINAL COST-

Back 10

the additional cost to you over and above the costs you have already incurred.

Front 11

Define SUNK COST-

Back 11

costs that have already been incurred and cannot be recovered.

Front 12

Define MARGINAL BENEFIT-

Back 12

the additional benefit above what you've already derived.

Front 13

With Marginal cost and Marginal benefit, define the economics decision rule:

Back 13

If the marginal benefits of doing something exceed the marginal costs, do it.
If the marginal costs of doing something exceed the marginal benefits, dont do it

Front 14

Define OPPORTUNITY COST-

Back 14

th ebenefit that you might have gained from choosing the next-best alternative.

Front 15

Define ECONOMIC FORCES-

Back 15

The necessary reactions to scarcity.

Front 16

Define MARKET FORCE-

Back 16

an economic force that is given relatively free rein by society to work through the market.

Front 17

Define IVISIBLE HAND-

Back 17

the price mechanism, the rise and fall of prices that guides or actions in a market.

Front 18

Define ABDUCTION-

Back 18

a method of analysis that uses a combination of inductive methods and deductive methods.

Front 19

Define THEOREMS-

Back 19

propostitions that are logically true based on the assumptions in a model.

Front 20

Define PRECEPTS-

Back 20

policy rules that conclude that a particular course of action is preferable.

Front 21

INVISIBLE HAND-
When the quantity supplied is grater than the quantity demanded___________

Back 21

price has a tendency to fall.

Front 22

INVISIBLE HAND-
When the quantity demanded is greater than the quantity supplied_____________

Back 22

price has a tendency to rise.

Front 23

Define EFFICIENCY-

Back 23

achieving a goal as scheaply as possible

Front 24

INVISIBLE HAND THEOREM

Back 24

a market economy, through the price mechanism, will tend to allocate resources efficiently.

Front 25

Define MICROECONOMICS-

Back 25

the study of indiviual choice, and how that choice is influenced by economic forces.

Front 26

Define MACROECONOMICS-

Back 26

the study of the economy as a whole.

Front 27

Define ECONOMIC POLICIES-

Back 27

actions or inactions taken by government to influence economic actions.

Front 28

Define POSITIVE ECONOMICS-

Back 28

the study of what is, and how the economy works. Explores the pure theory of economic, and it discovers agreed-upon empirical regularities.

Front 29

Define NORMATIVE ECONOMICS-

Back 29

the study of what the goals of the economy should be.

Front 30

Define ART OF ECONOMICS

Back 30

application of the knowledge learned in positive economics to the achievement of the goals one has determined in normative economics.