Chapter 1-The why and who of Economics

Question 1

Economic Perspective

Answer 1

A viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions

Question 2

Opportunity Cost

Answer 2

The amount of other products that must be forgone or sacrificed to produce a unit of a product

Question 3

Utility

Answer 3

The satisfaction a consumer obtains from the consumption of a good or service

Question 4

Marginal analysis

Answer 4

The comparison of marginal benefits and marginal costs for decision making

Question 5

Scientific Methods

Answer 5

The procedure for the systematic pursuit of knowledge involving the observation of facts and the formulation and testing of hypotheses to obtain theories, principles and laws

Question 6

Economic principle

Answer 6

A widely accepted generalisation about the economic behaviour of individuals or institutions

Question 7

Other things equal assumption

Answer 7

The assumption that factors other than those being concerned are held constant, ceteris paribus

Question 8

Macro economics

Answer 8

The part of economics concerned with the economy as a whole.

Question 9

Micro economics

Answer 9

The part of economics concerned with decision making by individual units and markets (households)

Question 10

Aggregate

Answer 10

A collection of specific economic units treated as if they were one.

Question 11

Positive economics

Answer 11

The analysis of facts or data to establish scientific generalisations about economic behaviour

Question 12

Normative Economics

Answer 12

The part of economics involving value judgements about what the economy should be like, focused on which economic goals and policies should be implemented.

Question 13

Economics

Answer 13

The social science concerned with how individuals, institutions and society make optimal choices under conditions of scarcity