Chapter 1-3 exam Flashcards
the social science concerned with efficient use if scarce (limited) resources to maximize the satisfaction of people’s wants
economics
3 decisión makers?
household, government, and businesses
4 resource categories/ 4 factors of production
land, labor, capital (physical & financial), & entrepreneurship (supply creates its own demand)
2 efficiencies
least cost (productive efficiency)
most wanted (allocative)
Satisfaction = ?
happiness or utility
we assume that people are…?
rational (not random) maximizers
scientific method to quantify economic behaviors steps;?
- an issue/ problem
2.a hypothesis - a theory
the theory for the u.s applies to all other countries & times
Principle/ law
a model?
a set of principles/ laws
the process or finding the explanations to the problem ( based on facts; “what is”
theoretical economics
the process of using the theoretical findings to create the solutions to the problem (based on value judgment; “what it ought to be”)
policy economics
a study to aggregate (national level) decisions
macroeconómics
a study of a specific (a subset of the national level) decision
microeconomics
equation of a straight line
y = a + b*X
y is…
dependent
x is….
independent
a is the….
constant term or vertical intercept on a graph