AppliedEconMidterm.docx - I.From the given set of words...

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I.From the given set of words, identify what is asked from each item: Opportunity cost Microeconomics Law of Supply Demand Circular flow model Command Economic theory Macroeconomics Positive Economics Economics Buyers Supply Tradition Economic Model Normative Economics Relative price Market Law of Demand Money price 1. A formal statement of an economic theory often composed of diagrams and equations. 2. Classification of economics that takes a close-up view of the economy and analyzes individual parts of an economy rather than the whole economy. 3. The negative relationship between price and quantity demanded. It tells us what would happen to the quantity of a good that people would choose to buy if only the price of that good changed and all other factors affecting demand for that good remained unchanged. 4. A statement or set of related statements of a presumed relationship between two or more economic variables. 5. Distinction of economics that attempts to determine how the world is and how the world works. It can be tested whether it is right or wrong by checking it against the facts.
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