Microeconomics Chapter 1 Flashcards
What are 5 different reasons to study Economics?
- Opportunity Costs
- Marginalism
- Efficient Market
- To Understand Society
- To be an Informed Citizen
What are Opportunity Costs?
They are the best alternative that are forgo or give up to make a choice or decision.
What is Marginalism?
It is the analyzing of addition, or, incremental, or benefits from a decision or choice.
What is Efficient Market?
It is when profit opportunities are eliminated instantaneously.
How does understanding society impact economics?
Understanding the past and present economic decisions can have major impact on the character of life in a society.
What are Microeconomics?
It is the branch of economics that examines the functioning of individual industries and behaviors of individual decision-making units: households and firms.
What are Macroeconomics?
It is the branch of economics that examines the economic behavior of aggregates such as income, output on a national level.
What are Positive Economics?
It is an approach to economics that examines the behavior and operations of systems without making judgements.
What is Normative Economics (Policy Economics)?
It is the approach to economics that examines the economic behavior evaluates them as good or as bad and prescribe a course of action.
What are the 4 Criterias for Judging Economic Outcome?
- Efficiency
- Equity (Fairness)
- Growth (GDP)
- Stability
What is Efficiency?
In economics, efficiency means allocative efficiency. An efficient economy is one that produces what people want at the least possible cost.
What is Growth?
Economic growth is an increase in the total output of an economy. If output grows faster than the population, output per person rises and standards of living increase.
What is Stability?
Economic stability refers to the condition in which national output is growing steadily, with low inflation and full employment of resources.
