Set: Economics Ch. 1
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All 32 Terms
| | Term | Definition |
|---|---|---|
| |
economics | social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants |
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scarcity | limits options and necessitates that we make choices because, "we can't have it all." |
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"no free lunch" | there is always a cost to someone-ultimately to society |
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opportunity cost | to get more of one thing, you forgo the opportunity of getting something else. cost of that which you get is the value of that which is sacrificed to obtain it. |
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rational self-interest | individuals pursue actions that will enable them to achieve their greatest satisfaction |
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rational self-interest (3 impl) | 1. individuals will make different choices under different circumstances 2. different individuals will make different choices 3. rational decisions may change as costs and benefits change |
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marginal analysis | comparisons of marginal costs and marginal benefits |
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marginal | extra, additional, "a change in" |
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marginal analysis (3 impl) | 1. each option involves marginal benefits and, bc of scarce resources, marginal costs. 2. marginal benefit always includes marginal cost of forgoing smtg else. 3."too much": goods obtained beyond point where marginal cost equals marginal benefit (alternatives are more valuable at the margin) |
| |
law/principle | well tested and widely accepted theory |
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theory | tested hypothesis that returns favorable results |
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model | simplified representations of how smtg works. incorporates combinations of laws or principles |
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theoretical economics | process of deriving theories and principles. systematically arrange facts (cause and effect order), interpret and generalize from them. |
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economic theories/principles | statements about economic behavior or the economy that enable prediction of the probable effects of certain actions. |
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analytical economics | the ascertaining of cause and effect, of action and outcome, within the economic system. |
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generalization (3 impl) | 1. theories, principles and laws are imprecise because econ facts are usually diverse. 2. no 2 individuals or institutions will act exactly the same. 3. econ principles are expressed as the tendencies of typical or average consumers, workers or business firms |
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ceteris paribus | other-things-equal assumption |
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ceteris paribus (impl) | assumption that all other variables except those under immediate consideration are held constant for a particular analysis |
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abstraction (impl) | econ principles, or theories, are simplifications that omit irrelevant facts or circumstances. models do not mirror full complexity of the real world. (maps) |
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policy economics | recognizes that theories and data can be used to formulate courses of action based on principles and intended to solve a specific problem or further an economic goal. |
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economic goals | 1. growth 2. full employ 3. efficiency 4. price-level stability 5. freedom 6. equitable distribution of income 7. security 8. balance of trade |
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tradeoffs | mutually exclusive goals demand that, to achieve one, we must sacrifice another |
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aggregate | collection of specific economic units treated as if they were one unit |
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macroeconomics | examines the economy as a whole or its basic subdivisions or aggregates, such as gov't, household and business sectors. |
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microeconomics | examines specific economic units, such as an indiviual industry, firm or household. |
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positive economics | focuses on facts and cause-and-effect relationships. Includes description, theory development, and theory testing (theoretical econ). Avoids value judgments and tries to establish scientific statements about econ behaviour. "what is" |
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normative economics | incorporates value judgements about what an economy should be like or what particular policy actions should be recommended to achieve a desirable goal. (policy economics) "what should be." |
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fallacy of composition | assumption that what is true for one individual or part of a whole is necessarily true for a group of individulas or the whole. generalizations valid at one level of analysis may or may not be valid at the other. (view from bleachers) |
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post hoc, ergo propter hoc (fallacy) | "after this, therefore because of this." rooster crows at dawn, but doesn't cause the sun to rise. |
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correlation | that two events or two sets of data are associated in some sytematic or dependable way. |
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induction | operation of the mind by which we infer that what we know to be true in a particular case or cases will be true in all cases that resemble the former in certain assignable respects |
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deduction | inference by reasoning from generals to particulars |
Set Information
| Terms | 32 |
| Creator | elmcityfree |
| Created | May 24, 2007 |
| Groups | None |
| Tag | economics |
| Access | Anyone |
| Edit | Creator Only |
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elmcityfree : Changed abstractions implications → econ principles, or theories, are simplifications that omit irrelevane facts or circumstances. models do not mirror full complexity of the real world. (maps) to abstraction implications → econ principles, or theories, are simplifications that omit irrelevant facts or circumstances. models do not mirror full complexity of the real world. (maps)
elmcityfree : Changed correlation → that two events or two sets of data are associated in some sytematic or dependable way. not causation. to correlation → that two events or two sets of data are associated in some sytematic or dependable way.
elmcityfree : Changed post hoc, ergo propter hoc (fallacy) → "after this, therefore because of this." rooster crows at dawn, but doesn't cause the sun to rise. to post hoc, ergo propter hoc fallacy → "after this, therefore because of this." rooster crows at dawn, but doesn't cause the sun to rise.
elmcityfree : Changed generalization implications → 1. theories, principles and laws are imprecise because econ facts are usually diverse. 2. no 2 individuals or institutions will act exactly the same. 3. econ principles are expressed as the tendencies of typical or average consumers, workersor business firms to generalization implications → 1. theories, principles and laws are imprecise because econ facts are usually diverse. 2. no 2 individuals or institutions will act exactly the same. 3. econ principles are expressed as the tendencies of typical or average consumers, workers or business firms
elmcityfree : Changed marginal analysis implications → 1. each option involves marginal benefits and, bc of scarce resources, marginal costs. 2. marginal benefit always includes marginal cost of forgoing smtg else. 3."too much": goods obtained beyond point where marginal cost equals marginal benefit (alternatives are more valuable at the margin) to marginal analysis (implications) → 1. each option involves marginal benefits and, bc of scarce resources, marginal costs. 2. marginal benefit always includes marginal cost of forgoing smtg else. 3."too much": goods obtained beyond point where marginal cost equals marginal benefit (alternatives are more valuable at the margin)
elmcityfree : Changed post hoc, ergo propter hoc fallacy → "after this, therefore because of this." rooster crows at dawn, but doesn't cause the sun to rise. to post hoc, ergo propter hoc (fallacy) → "after this, therefore because of this." rooster crows at dawn, but doesn't cause the sun to rise.
elmcityfree : Changed marginal analysis (implications) → 1. each option involves marginal benefits and, bc of scarce resources, marginal costs. 2. marginal benefit always includes marginal cost of forgoing smtg else. 3."too much": goods obtained beyond point where marginal cost equals marginal benefit (alternatives are more valuable at the margin) to marginal analysis (3 impl) → 1. each option involves marginal benefits and, bc of scarce resources, marginal costs. 2. marginal benefit always includes marginal cost of forgoing smtg else. 3."too much": goods obtained beyond point where marginal cost equals marginal benefit (alternatives are more valuable at the margin)
elmcityfree : Changed rational self-interest implications → 1. individuals will make different choices under different circumstances 2. different individuals will make different choices 3. rational decisions may change as costs and benefits change to rational self-interest (3 impl) → 1. individuals will make different choices under different circumstances 2. different individuals will make different choices 3. rational decisions may change as costs and benefits change
elmcityfree : Changed generalization implications → 1. theories, principles and laws are imprecise because econ facts are usually diverse. 2. no 2 individuals or institutions will act exactly the same. 3. econ principles are expressed as the tendencies of typical or average consumers, workers or business firms to generalization (3 impl) → 1. theories, principles and laws are imprecise because econ facts are usually diverse. 2. no 2 individuals or institutions will act exactly the same. 3. econ principles are expressed as the tendencies of typical or average consumers, workers or business firms
elmcityfree : Changed ceteris paribus implications → assumption that all other variables except those under immediate consideration are held constant for a particular analysis to ceteris paribus (impl) → assumption that all other variables except those under immediate consideration are held constant for a particular analysis
elmcityfree : Changed abstraction implications → econ principles, or theories, are simplifications that omit irrelevant facts or circumstances. models do not mirror full complexity of the real world. (maps) to abstraction (impl) → econ principles, or theories, are simplifications that omit irrelevant facts or circumstances. models do not mirror full complexity of the real world. (maps)
Last Message: 15 months ago
Most Missed Words
- economic theories/principles → statements about economic behavior or the economy that enable prediction of the probable effects of certain actions. - 3 misses
- theoretical economics → process of deriving theories and principles. systematically arrange facts (cause and effect order), interpret and generalize from them. - 2 misses
- rational self-interest (3 impl) → 1. individuals will make different choices under different circumstances 2. different individuals will make different choices 3. rational decisions may change as costs and benefits change - 1 miss
- marginal analysis (3 impl) → 1. each option involves marginal benefits and, bc of scarce resources, marginal costs. 2. marginal benefit always includes marginal cost of forgoing smtg else. 3."too much": goods obtained beyond point where marginal cost equals marginal benefit (alternatives are more valuable at the margin) - 1 miss
- analytical economics → the ascertaining of cause and effect, of action and outcome, within the economic system. - 1 miss
- policy economics → recognizes that theories and data can be used to formulate courses of action based on principles and intended to solve a specific problem or further an economic goal. - 1 miss
- tradeoffs → mutually exclusive goals demand that, to achieve one, we must sacrifice another - 1 miss