the study of the behavior of the economy as a whole, including such economywide phenomena as changes in unemployment, the general price level, and national income
total amounts or quantities; aggregate demand, for example, is total planned expenditures throughout a nation
a society's institutional mechanism for determining the way in which scarce resources are used to satisfy humans desires
the assumption that people do not intentionally make decisions that would leave them worse off
models, or theories
simplified representations of the real world used as the basis for predictions or explanations
ceteris paribus assumption
the assumption that nothing changes except the factor or factors being studied
an approach to the study of consumer behavior that emphasizes psychological limitations and complications that potentially interfere with rational decision making
the hypothesis that people are nearby, but not fully, rational, so that they cannot examine every possible choice available to them but instead use simple rules of thumb to sort among the alternatives that happen to occur to them
analysis that is strictly limited to making either purely descriptive statements or specific predictions; for example, "If A, then B" A statement of what is
analysis involving value judgements about economic policies; relates to whether outcomes are good or bad. A statement of what ought to be.
myra decides to study an extra hour for her test to pass it.. based on rationality assumption or not
individuals make short run choices that are non consistent with their long-term goals
the individual decides against health care as it may make him better off
does not apply to the economic way of thinking with issues in health care.