Ch 1 - Econ: The Study Of Choice Flashcards
D scarcity
The condition of having to choose among alternatives
D scarce good
One for which the choice of one alternative use of the good requires that one be given up
D free good
One for which the choice of one use does not require that we give up another
Every economy must answer what three questions?
1) what should be produced
2) how should goods and services be produced?
3) for whom should goods and services be produced?
Opportunity cost is…
The value of the best alternative forgone in making any choice
What three features distinguish the economic approach to choice from the approaches taken in other social sciences?
1) economists give special emphasis to the role of opportunity costs in their analysis to choices.
2) econs assume that indiv make choices that seek to maximize the value of some objective, and Hagar they define their objectives in terms of their own self-interest
3) indiv maximize by deciding whether to do a little more or less of something. 1.2
What is a margin in the economic context?
The current level of an activity. Like an edge from which a choice is to be made.
A choice at the margin is to…
Do a little more or a little less of something.
Microeconomics is…
The branch of Econ that focuses on the choices made by individual decision making units in the economy- typically consumers and firms- and the impacts those choices have on individual markets.
Macroeconomics is…
The branch of Econ that focuses on the impact of the total, or aggregate, level of Econ activity
A variable is…
Something whose value can change
A constant is…
Something whose value does not change.
What is the scientific method?
A systemic set of procedures through which knowledge is created.
What is a hypothesis?
An assertion of a relationship between two or more variables that could be proven to be false. A statement is not a hypothesis of no conceivable test could show it to be false.
A hypothesis that has not been rejected after widespread testing and that wins general acceptance is commonly called…
A theory.
