Chapter 1 Vocab - • Microeconomics-Study of household and...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 1 Section 1 Economics- The study of the allocation of our limited resources to satisfy our unlimited wants Resources- Inputs used to produce goods and services Scarcity- Exists when human wants (material and non material) exceed available resources The Economic Problem- Scarcity forces us to choose, and choices are costly because we must give up other opportunities that we value Section 2 Rational Behavior- People do the best they can, based on their values of information, under current and anticipated future circumstances Section 3 Theory- Statement or proposition used to explain and predict behavior in the real world Hypothesis- A testable proposition Empirical Analysis- The use of data to test a hypothesis Ceteris Paribus- Holding all other things constant
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: • Microeconomics-Study of household and firm behavior and how they interact in the marketplace • Macroeconomics-Study of the whole economy, including the topics of inflation, unemployment, and economic growth. • Aggregate-The total amount Section 4 • Correlation-When two events occur together • Causation-When one event brings about another event • Fallacy of Composition-The incorrect view that what is true for the individual is always true for the group. Section 5 • Positive Analysis-an objective, testable statement that describes what happens and why it happens • Normative Analysis-A subjective, contestable statement that attempts to describe what should be done....
View Full Document

This note was uploaded on 04/16/2008 for the course ECONOMICS 104 taught by Professor Crocker during the Fall '08 term at UMass (Amherst).

Page1 / 2

Chapter 1 Vocab - • Microeconomics-Study of household and...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online