macroquiz1

Macroquiz1 - Ch.1 Limits Alternatives Choices Macro Quiz#1 Definitions Economics the social science concerned with how individual institutions

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Macro Quiz#1 Definitions Economics : the social science concerned with how individual, institutions, & society make optimal (best) choices under conditions of scarcity Economic Perspective : a viewpoint that envisions individuals & institutions making rational decisions by 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 pressure a consumer obtains from Marginal Analysis : the comparison of marginal (“extra” or “additional”) benefits & marginal costs, usually for decision making Scientific Method : the procedure for the systematic pursuit of knowledge involving the observation of facts Economic Principle : a widely accepted generalization about the economic behavior of individual or institutions “Other-Things-Equal” assumption (ceteris paribus) : the assumption that factors other than those being considered are held constant Macroeconomics : the part of economics concerned with the economy as a whole; with such major aggregates as the household, business & gov’t sectors; and with measures of the total economy Aggregate : a collection of specific economic units treated as it they were one. For ex., all prices of individual goods & services are combined into a price level, or all units of output are aggregated into gross domestic product Microeconomics : the part of economics concerned with decision making by individuals units such as a household, a firm, or an industry, & with individual markets, specific goods & services, & product & resource prices Positive Economics : the analysis of facts or date to establish scientific generalizations about economic behavior Normative Economics : the part of economics involving value judgments about what the economy should be Economizing Problem : the choices necessitated b/c society’s economic wants for goods & services are unlimited but the resources available to satisfy these wants are limited (scarce) Budget Line : (or more technically, a budget constraint) is a schedule or curve that shows various combos of two products a consumer can purchase with a specific money income Economic Resources : the land, labor, capital & entrepreneurial ability that are used in the production of goods & services; productive agents; factors or production Factors or Production : economic resources: land, capital, labor or entrepreneurial ability Land Labor
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This note was uploaded on 04/17/2008 for the course E/M 101 taught by Professor Hayes during the Fall '08 term at Gustavus.

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Macroquiz1 - Ch.1 Limits Alternatives Choices Macro Quiz#1 Definitions Economics the social science concerned with how individual institutions

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