Economics Chapter 1

Front 1

Define economics.

Back 1

the social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants.

Front 2

Define economic perspective.

Back 2

a viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions.

Front 3

Define utility.

Back 3

the want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service (or from the consumption of a collection of goods and services.)

Front 4

Define marginal analysis.

Back 4

the comparison of marginal ("extra" or "additional") benefits and marginal costs, usually for decision making.

Front 5

Define scientific method.

Back 5

the procedure for the systematic pursuit of knowledge involving the observation of facts and the formulation and testing of hypotheses to obtain theories, principles, and laws.

Front 6

Define theoretical economics.

Back 6

the process of deriving and applying economic theories and principles.

Front 7

Define principles.

Back 7

statements about economic behavior or the economy that enable prediction of the probable effects of certain actions.

Front 8

Define generalizations.

Back 8

statement of the nature of the relationship between two or more sets of facts.

Front 9

Define the other-things-equal assumption.

Back 9

the assumption that factors other than those being considered are held constant.

Front 10

Define policy economics.

Back 10

the formulation of courses of action to bring about desired economic outcomes or to prevent undesired occurrences.

Front 11

Define tradeoffs.

Back 11

the sacrifice of some or all of one economic goal, good, or service to achieve some other goal, good, or service.

Front 12

Define macroeconomics.

Back 12

the part of economics concerned with the economy as a whole; with such major aggregates as the household, business, and government sectors; and with measures of the total economy.

Front 13

Define aggregate.

Back 13

a collection of specific economic units treated as if they were one unit.

Front 14

Define microeconomics.

Back 14

the part of economics concerned with such individual units as industries, firms, and households and with individual markets, specific goods and services, and product and resource prices.

Front 15

Define positive economics.

Back 15

the analysis of facts or data to establish scientific generalizations about economic behavior.

Front 16

Define normative economics.

Back 16

the part of economics involving value judgements about what the economy should be like; focused on which economic goals and policies should be implemented; policy economics.

Front 17

Define the fallacy of composition.

Back 17

the false notion that what is true for the individual (or part) is necessarily true for the group (or whole.)

Front 18

Define the "after this, therefore because of this," fallacy.

Back 18

the assumption that because event A precedes event B, A is the cause of B.