Economics-Study Guide Test 1

Economics-Study - Economics Social science concerned with how individuals institutions and society make optimal(best choices under conditions of

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics - Social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity. Opportunity Cost - ( Idea there is no free lunch) To obtain more of one thing, society forgoes the opportunity of getting the next best thing. Utility - The pleasure, happiness, or satisfaction obtained from obtaining a good or service. Marginal analysis - Comparisons of marginal benefits and marginal costs, usually for decision making. Scientific Method - Procedure- Observing real-world behavior and outcomes. Based on these observations, formulating a possible explanation of cause and effect (hypothesis) Testing this explanation by comparing the outcomes of specific events to the outcome predicted by the hypothesis. Accepting , rejecting, and modifying the hypothesis, based on these comparisons. Continuing to test the hypothesis against the facts. Other-Things- Equal-Assumption - The assumption that factors other than those being considered do not change. Micro-Economics - A part of economics concerned with individual units, such as a person, household, firm or industry. Observes the details of an economic unit, or very small segment of the economy under a figurative microscope. Macro-Economics - Examines either the economy as a whole or its basic subdivisions or aggregates, such as the government, household, and business sectors. Positive Economics- Focuses on facts and cause and effect relationships. Includes description. Theory development and theory testing. “ What is” “ Factual” Normative Economics- Incorporates value judgments about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal. Looks at the desirability of certain aspects of the economy. “What ought to be” Economizing Problem - The need to make choices because economic wants exceeds economic needs. Enhance your understanding of economic models and the different between Micro and Macro economics analysis. Budget Line- (Budget Constraint)- A schedule or curve that shows various combinations of 2 products a consumer can purchase with a specific money income.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Economic Resources- “Scarce Resources” – All natural, human, and manufactures resources that go into the production of goods and services, these are limited or scarce. Resource Categories- Land, Labor, Capitol Land - Consists of all natural resources (gifts of nature) used in the production process, such as arable land, forests, mineral, oil deposits, and water resources. Labor - Physical and mental talents of individuals used in the production process. (Logger, retail clerk, machinist, teacher, pro football player, and nuclear physicist). Capitol
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/01/2010 for the course ECO 2013 taught by Professor Haroldj.vanboven during the Fall '09 term at Edison State College.

Page1 / 7

Economics-Study - Economics Social science concerned with how individuals institutions and society make optimal(best choices under conditions of

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online