Unit_1 Lecture_part_1_ (1) Flashcards
What does ceteris paribus mean?
A device used to analyze the relationship between two variables while the values of other variables are held unchanged.
What is opportunity cost?
The best alternative that we forgo, or give up, when we make a choice or decision.
What are the three fundamental concepts of economics?
- Opportunity cost
- Marginalism
- Efficient markets
What is economics?
The study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided.
What is marginalism?
The process of analyzing the additional or incremental costs or benefits arising from a choice or decision.
What defines an efficient market?
A market in which profit opportunities are eliminated almost instantaneously.
What does positive economics seek to do?
Understand behavior and the operation of systems without making judgments.
What is normative economics?
An approach that analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action.
What is microeconomics?
The branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units.
What is macroeconomics?
The branch of economics that examines the economic behavior of aggregates on a national scale.
Fill in the blank: Economics is the study of how people make _______.
[choices]
What is a model in economics?
A formal statement of a theory, usually a mathematical statement of a presumed relationship between two or more variables.
What does the principle of Ockham’s razor state?
Irrelevant detail should be cut away.
What is the main focus of empirical economics?
What is the difference between microeconomics and macroeconomics?
- Microeconomics focuses on individual units like households and firms
- Macroeconomics focuses on aggregates like income and employment
What is the significance of being an informed citizen in economics?
It requires a basic understanding of economics.
True or False: Economics is a behavioral science.
True
What does the study of economics teach us?
A way of thinking and helps us make decisions.
What does stability refer to in economics?
What is the key word in the definition of economics?
Choose
What are scarce resources?
Resources that are limited.
What are the two kinds of questions economics deals with?
- Positive questions
- Normative questions
