Economics 1st Test Study Guide

Economics 1st Test Study Guide - 1. 2. 3. 4. 5. 6. 7. 8. 9....

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1. opportunity costs - the amount of other products that must be forgone or sacrificed to produce a unit of a produce 2. 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 3. marginal analysis - the comparison of marginal benefits and marginal costs, usually for decision making 4. scientific method - the procedure for the systematic pursuit of knowledge involving the observation of facts and the formulation and testing of hypotheses to obtain theories, principles, and laws 5. economic principle - a widely accepted generalization about the economic behavior of individuals or institutions 6. generalizations- statement of the nature of the relationship between two or more sets of facts 7. ceteris paribus assumption - the assumption that factors other than those being considered are held constant 8. macroeconomics - the part of economics concerned with the economy as a whole; with such major aggregates as the households, business, and government sectors 9. aggregate - a collection of specific economic units treated as if they were one 10. microeconomics - the part of economics concerned with decision making by individual units such as a household, firm, or an industry and with individual markets, specific goods, and services, and product and resource prices 11. positive economics - the analysis of facts or data to establish scientific generalizations about economic behavior 12. 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 13. economizing problem - the choices associated because society’s economic wants for goods and services are unlimited but the resources available to satisfy these wants are limited 14. budget line - a line that shows the different combinations of two products a consumer can purchase with a specific money income, given the products’ prices 15. economic resources - the land, labor, capital, and entrepreneurial ability that are used in the productions of goods and services; productive agents; factors of production 16. land - natural resources used to produce large amount of land to be produced 17. labor - people’s physical and mental talents and efforts that are used to help produce goods and services 18. capital - human-made resources (buildings, machinery, and equipment) used to produce goods and services 19. investment - spending for the production and accumulation of capital and additions to inventories 20. entrepreneurial ability - the human resource that combines the other resources to produce a product, makes nonroutine decision, innovates, and bears risks 21. consumer goods - products and services that satisfy human wants directly 22. capital goods - goods that do not directly satisfy human wants 23. Law of Increasing Opportunity Costs - the principle that as the production of a good increases, the opportunity cost of producing an additional unit
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Economics 1st Test Study Guide - 1. 2. 3. 4. 5. 6. 7. 8. 9....

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