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31 Cards in this Set
- Front
- Back
Economics
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The social science concerned with teh efficient use of scarce resources to achieve the maximum satisfaction of economic wants.
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Economic Perspective
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Stresses resource scarcity, the necessity of making choices, the assumption of rational behavior, comparisons of marginal benefit and marginal cost.
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Utility
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pleasusre, happiness or satisfaction.
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Marginal Analysis
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comparing additional benefits and additional costs.
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Scientific Method
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Method used to draw conclusions, probabilities, models etc.
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theoretical economics
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systematically arrange facts, interpret and generalize them. Put them into cause and effect order.
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principles
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statmes about economic behavior or the economy that enable prediction of the probably effects.
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generalizations
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economic theories, laws, and principles, are often imprecise; expressed as typical tendencies.
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policy economics
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recognizes that theories and data can be used to formulate policies.
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how to find the slope of a curve
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measure the slope at a particular point on the line and solve for the slope of the corresponding tangent line.
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graph
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a visual representation of the relationship between two variables.
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horizontal axis normally represents this variable
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independent variable
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vertical axis normally represents this variable
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dependent variable
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direct relationship (positive relationship)
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two variable (x,y) change in the same direction. IE(x increases and y increases or x deacreases and y decreases) This can be identified by an upward sloping line. (line: from bottom left to top right)
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inverse relationship (negative relationship)
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two variables (x,y) change in opposite directions; IE(x increases and y decreases or x decreases and y increases). This can be identified by an downward sloping line. (line: from top left to bottom right)
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Other-Things-Equal Assumption (Ceteris Paribus)
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The assumption that other factors will be constant or unchanged.
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How to find the slope of a straight line.
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It is the ratio of vertical change to horizontal change or Rise over Run.
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Positive slope
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It is indicated by positive numbers and a positive linear relationship.
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Negative slope
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It is indicated by negative numbers and a negative linear relationship.
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Vertical Intercept
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The point where the line meets the vertical axis.
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Equation of a Linear Relationship
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y = mx + b or y = a + bx. Where y = dependent variable; x = independent variable; mx/bx = slope multiplied by x. + a/b = the vertical intercept.
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tradeoffs
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to achieve one we must sacrifice the other.
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Macroeconomics
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Examines the economy as a whole or its basic subdivisions or aggregates.
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Microeconomics
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Looks at specific economic units. Individual industry, firm, household, etc.
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positive economics
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focuses on facts and cause and effect relationships.
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normative economics
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incorporates value judgements as to the ideal economy.
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fallacy of consumption
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What is true for one individual is true for the whole.
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post hoc fallacy
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reasoning where, after x, or therefore because of x. Event A, although it precedes event B is not necessarily the cause of B.
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aggregate
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A collection of specific economic units treated as if they were one unit.
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economizing problem
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Society's wantes versus economic resources.
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scarce resources
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The limited quantities of land, labor, capital and entreprenureial ability.
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