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13 Cards in this Set

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What is Economics?
A Social Science that • Deals with the theory and management of economies or economic systems (how nations manage the production, distribution and consumption of goods and services.)
What is Positive Economics?
analysis that answers the “what is” or “what will be” questions. How will an increase in the minimum wage affect teenage employment?
What is Normative Economics?
analysis that answers the “what ought to be” questions. Should the government increase the minimum wage?
Why do economist disagree?
•Differences in scientific judgment.
•Differences in values.
•Perception versus reality.
What is "micro" economics?
Micro- study of choices made by individual consumers, firms and governments and how these decisions affect the market for a particular product.
What is "macro" economics?
Study of the nation’s economy as a whole.
What is Ceteris Paribus?
•Latin for “others things being equal.”
•To study the relationship b/w two variables, we assume that other variables do not change.
•Assumptions simplify complex issues and make them easier to understand.
What is scarcity?
•Means that there are not enough resources to satisfy unlimited wants and needs.
•All goods and services are scarce because the resources needed to produce them are scarce. Society always faces trade offs.
What is shortage?
•A shortage is a "temporary mismatch" b/w quantity supplied and quantity demanded. (Example: shortage of on campus housing. Has this always been the case?)
What is a resource?
•Anything used to produce something else.
•Natural
•Human
•Capital
•“Factors of production”
Name the Factor of production?
•Land- Natural Resources; created by acts of nature; arable land, beaches, water or minerals.
•Labor- Human effort; physical and mental effort used to produce; can be scarce because of time limits.
•Physical Capital- Man made; used to produce goods and services; buildings, machine, road, pencil, paper.
•Human Capital- Knowledge and skills acquired through education and experience; computer skills, read music, know city streets.
•Entrepunuership- Coordination of production and sales; entrepreneur ship comes up with idea, takes risk, commits money and time w/o guarantee of profit.
What are some functions of money?
oMedium of exchange
oUnit of accounting (standard of value)
oStore of value.
What are some characteristics of money?
o Durable
o Divisible
o Portable
o Acceptable