Economics Now Flashcards
Economize
Using resources wisely. Furthers personal.group goals while consuming least amount of available resources.
Economics
Social science of dealing with production, distribution, and use of goods/services, resources, and wealth. Science of scarcity/choice.
Economy
Complex/intricate system. Subject to changes. Consists of independent peope and groups. Involves series of transactions motivated by economic goals. Involved numerous transctions that crete two circular flows. Ex. ( Money moves in 1 direction, services move in the other)
Effective
Consume certain amount of resources acheive wanted result in the end. Then resource is; effective.
Efficient
Bare minimum of resources used to acheive wanted results
Opportunity Cost
Sum of all that’s lost from taking 1 course of action over another. A fundamental economics concept.
Analytical economics (Positive economics)
Descriptive: Portray things as they are in the past or present. Forecast on analysis of economic behaviour. “If x happens y will follow”
Normative economics (Policy economics)
Statements that contain value judgement. Expresses particular economist or group of– opinion on case. Based on judgements. “Municipal governments should provide more housing for homeless people.”
Fallacy
Hypothesis that’s been proven false, but still accepted by many people– appears to make sense
Fallacy of Composition: Good for 1 individual, not good for entire society
Ex. Individual farmer may decide to clear more land/plant more corn in an attempt to earn extrs income. If all Canadian farmers did this= corn overproduced= corn value drops and market crashes.
New price is so low, farmers can’t recover from operating expenses=bankrupty
Cause-and-effect fallacy (Post-hoc fallacy)
Assumes that one event causes another. What event comes before automatically causes the one after.
Capital good
Those goods in the production of other goods. (ex. ploughs needed to prepare soil for planting)
Fallacy of single causation
Premise that a single factor or person caused particular event to occur
Consumer good
Products/services that directly satisfy human wants (ex. bread).
Origin of economics
Greek word: Oikonomia: Wise management of one’s household
Human material wants always ___ available resources means we live in a condition of constant scarcity
Exceed
Economics
Study of the way we make decisions about the use of scarce resources.
Behaviour of groups is ___ , behaviour of separate individuals isn’t
Predictable
Economic Dilemna:
Wants exceeding ability to satisfy them
Economic decisions must be ___ and ___ . Efficiency allows saved resources to be used on other goals.
Efficient and effective
Scarcity of material things, it’s economically imperative to ___ and use things wisely to acheive right goals (effectiveness) and right way (efficiency)
Conserve
Value judgement play __ ___ in some decisions made by Canadian government
Major roles
Scientific method
4 Basic concepts:
- Observation
- Data collection
- Explanation
- Verification
After hypotheses, are validated they become ____ ___, ____, and theories
Economic laws, principles
_____ goods are needed to make consumer ____
Capital goods are needed to make consumer goods
Production possibility curves demonstrate fundamental problem of ____
Scarcity
- Only 2 products can be produced by this simple economy
Economic trade-off. Increased production of one good can be acheived only by sacrificing a sufficient quantity of the alternative product. (ex. Consumer goods=bread, and capital goods=plough)
- Economy has fixed tech and resources
NO tech innovations will be introduced to improve rate of production. Assumes that amount of productive resources available DOESN’T change. Existing resources btwn production of bread/ploughs can be shifted, but no additional resources can be imported to the economy. Only way to make more bread, is to produce fewer ploughs.
- Economy is at full employment
Model assumes all productive resources, including labour are fully employed and being used effectively/efficiently to productive max. output of goods/services
