Economics Study Guide

Economics Study Guide - Economics Study Guide Chapter One...

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Economics Study Guide Chapter One Definitions Voluntary exchange (yeah! I’ll volunteer for that to happen to me. .) : when both the buyer and seller are made better off by the transaction Allocative efficiency (ll =, reflectttt): a state of the economy where production reflects the consumers’ preferences; when MC=MB. Central planned Economy: an economy in which the government decides how the economy of the country will be run Market Economy: An economy in which the decisions for the economy are made by the interaction of the firms and households Mixed Economy: an economy in which most economic decisions are made by the household and firms, but are somewhat regulated by the government Positive analysis: “what is” Normative analysis: “what ought to be” Marginal analysis: an analysis comparing marginal benefits and costs Trade-off: the idea that in order to produce one more of one thing, less of some other thing will be produced Equity: when there is a fair distribution of economic benefits
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This note was uploaded on 10/21/2008 for the course ECO 001 taught by Professor Gunter during the Spring '06 term at Lehigh University .

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Economics Study Guide - Economics Study Guide Chapter One...

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