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22 Cards in this Set
- Front
- Back
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Economics
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Study of human behavior; focus on decision making
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Adam Smith
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Father of Economic Science (1776)
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Scarcity
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Fundamental:
less of a good freely available from nature than demand |
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Choice
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Selecting among alternatives
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Resource
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Input producing economic good
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Capital
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human made resources
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Objective
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Fact based on observable phenomena not influenced by difference in personal opinion
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Subjective
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Opinion based on personal preferences and value judgment
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Rationing
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Allocating limited supply among people who want more
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Economic Theory
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Set of definitions, postulates, and principles assembled in a manner that makes clear the 'cause and effect' relationships
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Opportunity cost
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highest valued alternative that must be sacrificed as a result of choosing an option
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Economizing Behavior
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Choosing option that offers greatest benefit at least cost
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Utility
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Subjective benefit or satisfaction a person expects from a choice or course of actions
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Marginal
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term used to describe the effects of a change in current situation
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Secondary effects
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indirect impact of event or policy that may not be easily and immediately observable; often unintended and overlooked
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Scientific Thinking
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Develop theory from basic principles and testing against events in real world
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Positive Economics
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Scientific study of 'what is' among economic relationships
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Normative Economics
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Judgments about 'what ought to be' in economic matters; can't be proven false because based on value judgments
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Ceteris Paribus
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Latin 'other things constant' the effect of one change is being described, recognizing that if other things changed, could affect the results
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Fallacy of composition
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Erroneous view that what is true for individual is true for he group
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Microeconomics
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Focuses on the affects human behavior has on the conduct of affairs within narrowly defined unit
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Macroeconomics
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Focuses on how human behavior affects outcomes in highly aggregated marks
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