ch1 what is economics Flashcards
economics is the study of ……… behaviour, trying to explain and …… how individuals and societies decide on the use of …….. resources to …….. their wants
human; predict; scarce; satisfy
economic predictions are statements that can be confirmed or falsified by …….
facts
features of a positive statement
。free from value judgment
。can be tested against facts (testable/ rejectable)
。need not be true
features of normative statements
。involves value judgment (e.g. should/ better)
。cannot be tested against facts (not testable/ rejectable)
it is assumed that all human have …….. wants
unlimited
resources are good that can be used to ….. goods and services or ……. our wants directly
produce; satisfy
scarcity means we want …… than we have, which means that resources are ……….. to satisfy all our wants
more; insufficient
facing the problem of scarcity, one can solve the problem by …….
choice
if more than one person want a good, …….. exists, thus, they are classified into …….. and ………
competition; winners; losers
what are conditions for competition to exist
scarcity and society
definition of price competition
。people who are willing to pay for goods
definition of non-price competition
。do not use price as the competitive criteria
definition of discrimination in economics
。distinguishing winners and losers
when chhosing something, we have to ……. things, the sacrifice is called ……… cost or cost
sacrifice; opportunity
oppurtunity cost is the highest- value ….. ……..
option forgone
full cost = ?
money cost + non-money cost
sunk cost
。non-recoverable
。does not represent any options forgone
。not a cost but past expenditure
economic good
。quantity available is insufficient to satisfy wants
。more is preffered
。competition involved
。requires scarce resources and cost is involved
free good
。quantity available is sufficient to satisfy wants
。less is preffered
。competition not involved
。does not require scarce resources and cost is not involved
