Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
36 Cards in this Set
- Front
- Back
|
Economics |
A social science concerned with making optimal choices under conditions of scarcity |
|
|
Scarcity |
When there are unlimited wants but limited economic resources to make goods and services to satisfy those wants |
|
|
Opportunity Cost |
Giving up the next best thing to obtain more of one thing |
|
|
Purposeful Behaviour |
Making decisions with desired outcome in mind. Uses rational self-interest. |
|
|
Utility |
Pleasure, happiness or satisfaction obtained from consuming a good or service |
|
|
Marginal Analysis |
Making decisions by comparing marginal benefits and marginal costs |
|
|
Marginal Benefit |
Additional satisfaction/utility a person receives by consuming one more unit of product |
|
|
Marginal Costs |
Cost added to produce one more unit of good/service |
|
|
Generalizations |
Economic principles that reflect characteristics of average consumers, workers and business firms |
|
|
Other-things-equal assumptions |
Ceteris paribus. Assume non-immediate factors are constant |
|
|
Graphical Expression |
Graph used represent economic models |
|
|
Microeconomics |
The study of individual consumers, firms or market |
|
|
Macroeconomics |
The study of the entire economy or a major aggregate of the economy |
|
|
Aggregate |
Treating a collection of specific economic units as one unit |
|
|
Positive Economics |
Factual economic statements |
|
|
Normative Economics |
Economic statements that involve value judgement |
|
|
The Economizing Problem |
Happens when there is limited income and unlimited wants. This causes the need to make choices. |
|
|
Budget Line |
Schedule or curve that shows various combinations of two products consumers can purchase with specific money income |
|
|
Economic Resources |
Resources used to produce goods and services. They consist of land, labor, capital (investment) and entrepreneurial ability. |
|
|
Land |
Natural resources used in the production process such as forests, minerals and oil |
|
|
Labor |
Human contribution to the production process. These contributions can be physical or mental activities |
|
|
Capital |
Assets used to produce goods and services e.g. machinery |
|
|
Entrepreneurial Ability |
Ability of the entrepreneur to take risks, set strategies, innovate and combine the other factors of production to make a successful business. |
|
|
Investment |
Spending used to produce goods and services, and accumulation of capital goods. |
|
|
Capital Goods |
Goods that help in producing consumer goods. Capital goods satisfy wants indirectly. |
|
|
Production Possibilities Model |
Economic model that shows different combinations of two goods that an economy can produce. Assumes economy is fully employed, with fixed technology, fixed resources and only two goods (consumer and capital goods) |
|
|
Consumer Goods |
Goods that satisfy consumer wants directly |
|
|
Law of Increasing Opportunity Costs |
As more of a particular good is produced, its marginal opportunity costs increase |
|
|
Production Possibilities Curve |
Concave shape |
|
|
Economic Rationale |
Economic resources are not always suitable for other uses. e.g. oil land used for farming |
|
|
International Trade |
Consists of specialization and increased production possibilities |
|
|
Biases |
Preconceptions that are not supported by facts |
|
|
Loaded Terminology |
Words or names that contain emotion, not neutral or objective |
|
|
Fallacy of Composition |
Assumption that what is true for one individual or part is always true for a group of individuals or a whole |
|
|
Post Hoc Fallacy |
Assuming Event A causes Event B, because event A precedes event B |
|
|
Correlation not Causation |
Assuming one set of data affects another set of data, because sets of data are associated together. Thinking correlation = causation |
