Chapter 1/Chapter 2 Flashcards
What is economics?
Economics is the studies how incentive affect choices in the face of scarcity
Incentives are…
rewards or penalties that encourage or discourage choices
Scarcity is…
resources are finite choices involve trade-offs
Rational agents are…
trade-offs, opportunity costs, benefit
trade-offs are…
most choices involve cost and benefits
opportunity Cost is…
what you must give up
The definition for the study of microeconomics…
is the study of choices and individuals and business make the way these choices interact and are the influenced by the governements
Entrepreneurship is…
the human resource that organizes labor, land, and capital
Normative involves…
subjective statements that express opinions, value judgment or what ought to be
Positive statements…
focus on facts and objective statements
Ceteris Paribus means…
if all relevant things remain the same
PPF stands for..
Production Possibilities Frontier
PPF is…
for 2 goods and services is the boundary between the quantities that can be produced and the ones that cannot
PPF decreases…
increasing opportunity cost
PPF increasing…
increasing opportunity cost
