lesson 1 - intro to macroecon

Question 1

economics

Answer 1

the study of how individuals and societies choose to allocate scarce resources

Question 2

scarcity

Answer 2

the fact that there is a limited amount of resources for unlimited wants
e.g diamonds are scarce

Question 3

economic resources/factors of production

Answer 3

the four factors of production are:
1. land (natural resources)
2. labour (work by humans)
3. capital ( tools, equipment, facilities)
4. entrepreneurship (ideas and managing a business)

Question 4

models

Answer 4

graphical and mathematical tools created to understand economics

Question 5

ceteris paribus

Answer 5

“all else equal”

Question 6

agent

Answer 6

some entity making a decision (can be an individual, household, business, city, gov)

Question 7

incentives

Answer 7

rewards or punishments associated with possible actions

Question 8

rational decision making

Answer 8

rational decisions are made through use of all available information (models assume agents are rational)

Question 9

positive analysis

Answer 9

analytical thinking about objective facts

Question 10

normative analysis

Answer 10

subjective thinkingm