Chapter 1 and 2 Notes

Chapter 1 and 2 Notes - Economics 8/29/06 Vocabulary Ch1...

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Economics 8/29/06 Vocabulary Ch1 Economics – The social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants Economic Perspective – The economic way of thinking Utility – Pleasure, happiness, or satisfaction Marginal Analysis – comparisons of additional benefits and additional costs Scientific Method – Observation of facts, formulation of explanation of cause & effect, testing of explaination, acceptance rejection or modification of hypothesis, continued testing Theoretical Economics – The process of deriving theory Principles – Statements about economic behavior or the economy that enable the prediction of the probable effects of certain actions Generalizations – Inprecise theories, principles, and laws Other-things-equal Assumption – assuming that all other variables except those under immediate consideration are held constant Policy Economics – Recognizes that theories and data can be used to formulate courses of action based on economic principles with intent to solve a problem or further a goal Tradeoffs – To achieve a goal by sacrificing another Macroeconomics – examines either the economy as a whole or its basic subdivisions or aggregates Aggregate – A collection of specific economic units treated as if they were one unit Microeconomics – Looking at specific economic units Positive Economics – focuses on facts and cause-and-effect relationships including theory development and testing. Normative Economics – Incorporates value judgments about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal Fallacy of Composition – The assumption that what is true for one individual or part of a whole is
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This note was uploaded on 04/12/2008 for the course ECO 112 taught by Professor Tolin during the Fall '08 term at West Chester.

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Chapter 1 and 2 Notes - Economics 8/29/06 Vocabulary Ch1...

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