Unit 1 Flashcards
economics
the social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity
opportunity cost
The amount of other products that must be forgone or sacrificed to produce a unit of a product.
utility
The want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service (or from the consumption of a collection of goods and services).
choice
the act of picking or deciding between two or more possibilities
cost
an economic loss used in comparison to a course of action
marginal analysis
the comparison of marginal (“extra” or “additional”) benefits and marginal costs, usually for decision making.
macroeconomics
the part of economics concerned with the performance and behavior of the economy, as a whole. Focuses on economic growth, the business cycle, interest rates, inflation, and the behavior of major economic aggregates such as the household, business, and government sector.
microeconomics
the part of economics concerned with (1)
normative economics
The part of economics involving value judgments about what the economy should be like; focused on which economic goals and policies should be implemented; policy economics.
positive economics
the analysis of facts or data to establish scientific generalizations about economic behavior
factors of production
the four economic resources: land, labor, capital, and entrepreneurial ability
consumer goods
products and services that satisfy human wants directly
capital goods
human-made resources (buildings, machinery, and equipment) used to produce goods and services; goods that do not directly satisfy human wants
ceteris paribus use in economics
Often, to isolate only one variable, economists cite ceteris paribus to clarify that their assumptions on a given outcome are only valid if all other variables are remaining the same.
