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19 Cards in this Set
- Front
- Back
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Economics
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social science that examines how societies use scarce resources to satisfy unlimited human wants
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Utility
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-what everybody wants
-happiness, satisfaction, pleasure |
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Resources
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the stuff we use to make things
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Scarce Resources
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limited if there is not enough for everyone to have some for free
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Opportunity Cost
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what you give up; the next best option
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Marginal Analysis
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for every choice, it is useful to compare the marginal benefit vs marginal cost
-if benefits are greater than the costs, do it, vice versa |
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Ceteris Paribus
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other-things-equal (Latin)
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Macroeconomics vs Microeconomics
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Economics that studies the aggregate or entire economy versus the type of economics that focuses on individual units
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Positive Economics
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What it is...
i.e. unemployment is at 7.6% |
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Normative Economics
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What it should be...
i.e. the government should do something about unemployment |
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Land
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a type of resource that is any natural object in an undeveloped state (before human activity)
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Labor
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any productive human activity, physical action and mental activities that contribute to the production of goods and services
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Capital
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man-made objects used for further production
Also... human and social (what and who you know) |
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Market
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an institution or mechanism that brings together buyers and sellers of a commodity
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Demand
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a schedule that shows the quantity of a commodity that buyers are willing and able to buy at a series of prices at a given time
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Law of Demand
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As price increases, quantity decreases
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Diminishing Marginal Utility
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the concept that as each successive good or service is consumed, the less marginal utility is rewarded incrementally
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Income Effect
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the positive relationship that exists between a change in income and the quantity of a good or service demanded
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Substitution Effect
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the idea that as prices rise consumers will replace relatively more expensive goods with relatively less expensive goods
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