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27 Cards in this Set
- Front
- Back
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Economics
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the study of the allocation of our limited resources to satisfy our unlimitted wants
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Resources
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inputs used to produce goods and services
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Scarcity
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exists when human wants (material and non-material) exceed available resources
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The economic problem
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scarcity forces us to choose, choices are costly because we must give up other opportunities that we value
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Rational Behavior
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people do the best they can, based on their values and information, under current and anticipated future circumstances
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Theory
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statement or proposition to explain and predict behavior in the real world
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Hypothesis
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a testable proposition
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Empirical analysis
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the use of data to test a hypothesis
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Ceteris Paribus
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holding all other things constant
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Microeconomics
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the study of household and firm behavior and how they interact in the marketplace
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Macroeconomics
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the study of the whole economy, including the topics of inflation, unemployment, and economic growth
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Aggregate
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the total amount - such as the aggregate level of output
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Correlation
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when two events occur together
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Causation
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when one event brings about another
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Fallacy of composition
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the incorrect view that what is true for the individual is always true for the group
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Positive analysis
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an objective, testable statement that describes what happens and why it happens
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Normative analysis
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a subjective, contestable statement that attempts to describe what should be done
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Y axis
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the vertical axis on a graph
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X axis
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the horizontal axis on a graph
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Pie chart
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visual display showing the relative size of various quantities that add up to 100%
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Bar graph
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visual display showing the comparison of quantities
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Time series graph
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visual tool to show changes in a variables' value over time
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Scatter diagram
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a graph showing the relationship of one variable to another
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Variable
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something that is measured by a number, such as height
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Positive relationship
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when two variables change in the same direction
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Negative relationship
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when two variables change in the opposite directions
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Slope
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the ratio of rise (change in the Y variable) over run (change in the X variable)
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