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10 Cards in this Set

  • Front
  • Back
scarcity
the economic problem. the condition facing all societies because there are not enough productive resources to satisfy people's unlimited wants
economics
the study of how people use their scarce resources to satisfy their unlimited wants
three productive resources
human (teacher), capital (computer), natural (tree)
goods vs. services
tangible item "that requires scarce resources to produce and satisfies human wants"; intangible item " "
two simplifying assumptions made by all economic theories
other things constant assumption- the idea is to identify variables of interest and focus exclusively on the relations among them, assuming nothing else of importance changes, other things remain constant

rational self interest- you try to maximize the expected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit
positive vs. normative statements
fact vs. opinion statements
marginal
one more

we buy marginal increments of products as long as marginal benefit outweighs marginal cost
micro vs. macroeconomics defined
market economics- study of economic behavior in particular markets, such as the market for computers

national economics- study of the economic behavior of the economy as a whole, especially the national economy
opportunity cost
value of the next best alternative being passed up
sunk cost
should be ignored because it can't be recovered; what was passed up