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26 Cards in this Set
- Front
- Back
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economics
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The social science concerned with how individuals, institutions and society make optimal choices under conditions of scarcity.
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What happens when economic resources are scarce.
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Means limited goods and services, Scarcity restricts options and demand
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How do economists view the statement "there is no free lunch"?
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Free products may be free to individuals ,but they are never free to society
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What are "opportunity costs"?
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To obtain more of one thing, society forgoes the opportunity of getting the next best thing.
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How do economists define "utility"?
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The pleasure, happiness or satisfaction obtained from consuming a good or service.
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What is "purposeful behavior"?
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People make decisions with some desired outcome in mind
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What is marginal analysis?
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Comparisons of marginal benefit and marginal cost, usually for decision making. To economist marginal means “extra” “additional” or a “change in”
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What is a hypothesis?
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A possible explanation of cause and effect
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What is an economic principle?
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A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions.
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Explain the importance of “ceteris paribus” in formulating economic principles
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Implementing the ceteris paribus assumption makes it possible to isolate the effect one factor has on another in the derivation and testing of hypotheses and principles.
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How do macroeconomics and microeconomics differ?
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Macro examine portions of the economy, like individuals , household, macro looks at everything as a whole.
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How do positive economics and normative economics differ?
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Positive focuses on facts and cause and effect relationships. Normative looks at the desirability of certain aspects of the economy.
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What do economists mean when they talk about the "economizing problem"?
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The need to make choices because economics wants exceed economic means
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What is the difference between luxuries and necessities?
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Luxuries – is what we want and can afford
Necessities- are what we need to survive |
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What does the author mean when he refers to a "budget line"?
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It’s a schedule or curve that shows various combinations of two products a consumer can purchase with a specific money income.
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Economists classified economic resources into four general categories. What are they?
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Land-
Labor- physical or mental talents Capital- facilities or equipment “Not Money” Entrepreneurial ability- he bears risk |
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Labor-
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physical or mental talents
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Capital-
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facilities or equipment “Not Money”
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Entrepreneurial ability-
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he bears risk
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How do consumer goods and capital goods differ?
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Good are two components consumer goods and capital good
Capital goods- benefit you indirectly .. |
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What is the production possibilities curve? What is its shape? What information does it provide?
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displys the different combinations of good and services tha t society can produce.
Curve |
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What does the term economic growth imply? What factors influence economic growth?
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pg 16
It mean “more” more tax, revenue, etc. |
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What is the "fallacy of composition"?
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pg 16
Assumption it is not correct. |
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What is the "post hoc fallacy"?
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Because “a” happen because “b” happened or didn’t
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What is the difference between correlation and causation?
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Pg 17
Causation -Increase or decrease in one caused the effect |
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What is the difference between variables being directly-related versus inversely-related?
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Directly is upward and to the right inverse in downward and to the right.
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