Chapter 1- Limits Alternatives And Choices Flashcards
1
Q
Economics
A
The study of how people, institutions, and society make choices under conditions of scarcity
2
Q
Opportunity cost
A
Represents the value of the good, service, or time forgone to obtain something else
3
Q
Utility
A
The pleasure, happiness, or satisfaction obtained from consuming a good or service
4
Q
Scientific method
A
- Observation
- formulation
- testing
- acceptance, rejection, modification
- continual testing
5
Q
Positive economics
A
Focuses on facts and cause-and-effect relationships
WHAT IS
6
Q
Normative economics
A
What ought to be
7
Q
Economic problem
A
People have limited income and unlimited wants
8
Q
Resource categories
A
1- land
2- labor
3- capital
4- entrepreneurial ability
9
Q
Prices of resource categories
A
1-land=rent
2-labor=wage
3-capital=interest
4-entrepreneurial ability=profit
