Economics (Scope & Method of Economics) Flashcards
efficient allocation of scarce means of production to satisfy unlimited human wants.
Economics
things that people desire more than what’s needed.
wants
Needs
things that you must have to survive.
COMMODITY
goods or services
Four Main Reasons to Study Economics:
To Learn a Way of Thinking
To Understand Society
To Understand Global Affairs
To Be an Informed Citizen
All decisions involve trade offs
The full cost of making a specific choice includes what we give up by not making the alternative choice.
Opportunity Cost
process of analyzing the additional or incremental costs or benefits arising from a choice or decision.
Marginalism
Costs that cannot be avoided because they have already been incurred
Sunk Costs
These are markets in which profit opportunities are eliminated rapidly by the actions of those seeking the profits.
Efficient Markets
“No Free Lunch”
Profit opportunities are rare because, at any one time, there are many people searching for them.
The period in England during the late eighteenth and early nineteenth centuries.
Industrial Revolution
new manufacturing technologies and improved transportation gave rise to the modern factory system and a massive movement of the population from the countryside to the cities.
Industrial Revolution
No one can understand how countries interact without knowing something about economics.
To Understand Global Affairs
Many political issues put before citizens for a vote embody economic issues.
To Be an Informed Citizen
Macroeconomics
The branch of economics that examines the economic behaviour of aggregates - income, employment, output, and so on—on a national scale.
