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28 Cards in this Set
- Front
- Back
Economics
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The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity.
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Economic Perspective
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A viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions.
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Opportunity Cost
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The amount of other products that must be forgone or sacrificed to produce a unit of a product.
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Utility
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The want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consuption of a good or service (or from the consuption of a collection of goods and services).
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Marginal Analysis
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The comparison of marginal ("extra" or "additional") benefits and marginal costs, usually for decision making.
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Scientific Method
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The procedure for the systematic pursuit of knowledge involving the observation of facts and teh formulation and testing of hypothesis to obtain theories, principles, and laws.
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Economic Principle
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A widely accepted generalization about the economic behavior of individuals or institutions.
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Other-Things-Equal Assumption
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The assumption that factors other than those being considered are held constant; ceteris paribus assumption.
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Macroeconomics
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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.
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Aggregate
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A collection of specific economic units treated as if they were one. For example, all prices of individual goods and services are combined into a price level and the real domestic output.
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Ceteris Paribus Assumption
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The Other-Things-Equal Assumption. The assumption that factors other than those being considered are held constant.
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Microeconomics
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The part of economics concerned with decision making by individual units such as a household, a firm, or an industry and with individual markets, specific goods and services, and product and resource prices.
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Positive Economics
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The analysis of facts or data to establish scientific generalizations about economic behavior.
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Normative Economics
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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.
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Economizing Problem
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The choices necessitated because society's economic wants for goods and services are unlimited but the resources available to satisfy these wants are limited (scarce).
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Budget Line
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Also called a Budget Constraint. It is a schedule or curve that shows various combinations of two products a consumer can purchase with a specific money income.
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Economic Resources
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The land, labor, capital, and entrepreneurial ability that are used in the production of goods and services; productive agents; factors of production.
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Land
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Natural resources ("free gifts of nature") used to produce goods and services.
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Labor
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People's physical and mental talents and efforts that are used to help produce goods and services.
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Capital
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Human-made resources (buildings, machinery, and equipment) useed to produce goods and services; goods that do not directly satisfy human wants; also called capital goods.
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Entrepreneurial Ability
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The human resource that combines the other resources to produce a product, makes nonroutine decisions, innovates, and bears risks.
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Factors of Production
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Economic resources; land, capital, labor, and entrepreneurial ability.
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Consumer Goods
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Products and services that satisfy human wants directly.
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Production Possibilities Curve
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A curve showing the different combinations of two goods or services that can be produced in a full-employment, full-production economy where the available supplies of resources and technology are fixed.
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Law of Increasing Opportunity Costs
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The principle that as the production of a good increases, the opportunity cost of producing an additional unit rises.
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Economic Growth
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(1) An outward shift in the production possiblities curve that results from an increase in resource supplies or quality or an improvement in technology; (2) an increase of real output (gross domestic product) or real output per capita.
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Investment
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Spending for the production and accumulation of capital and additions to inventories.
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Capital Goods
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Same as Capital. Human-made resources (buildings, machinery, and equipment) used to produce goods and services; goods that do not directly satisfy human wants.
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