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Econ 103 Study Notes - macroeconomics Positive Economics...

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Econ 103 Study Notes Chapter 1  -  Economics –  examines how individuals, institutions, and society make choices under  conditions of scarcity. Opportunity Costs –  to obtain more of 1 thing requires sacrificing the opportunity of getting the  next best thing.   Utility – the pleasure, happiness, or satisfaction obtained from consuming a good or service “Individuals look for and pursue opportunities to increase their  utility.” Marginal Analysis –  extra, additional, or change in.  Economic Principle  -  a very well-tested and widely accepted economic theory  Other things equal Assumption –  Factors other than those being considered do not change Aggregate-  collection of specific economic units treated as if they were one unit (used in 
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Unformatted text preview: macroeconomics) Positive Economics – focuses on facts and cause-effec t relationships, theory development, theory testing. “ The unemployment rate in France is higher than in the US.” Normative Economics - value judgements about economy, what it should be like, what policy actions should be recommended to achieve a desirable goal. “France ought to undertake policies to make its labor market more flexible to reduce unemployment rates.” - ought or should statements are in Normative Economics Economizing Problem – the need to make choices because economic wants exceed economic means...
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