13 terms

Economics Vocabulary Chapter 1

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Economics
Economics is the study of how people make optimum decisions when facing scarcity.
Macro Economics
Macro Economics is the study of how groups make optimal decisions.
Micro Economics
Micro Economics is the study of how individuals make optimal decisions.
Positive Economics
Positive Economics is the study of how things should be according to our values.
Normative Economics
Normative Economics is the study of how things are according to data.
Opportunity Cost
Opportunity Cost is the economic term that is the amount of other products that must be forgone or sacrifices to produce a unity of a product.
Equilibrium
Equilibrium is the economic term where demand meets supply on a graph.
Marginal Analysis
Marginal Analysis is the economic term where it is a cost benefit excerise. The comparison of marginal ("extra" or "additional") benefits and marginal cost, for decision making.
Marginal Benefit
Marginal Benefit is the economic term that is greater than marginal cost. The extra (additional) benefit of consuming on me ore unit of some good or service; the change in total benefit when one more unit is consumed.
Marginal Cost
Marginal Cost is the economic term where the extra (additional) cost of producing one more unit of output; equal to the change in total cost divided by the change in output (and in the short run, to the change in total variable cost divided by the change in output.
Ceteris Paribus
Ceteris Paribus is the economic term meaning all other things being equal.
Utility
Utility is the economic term for pleasure
Law Increasing Oppurnity Cost
Law Increasing Oppurnity Cost is the principle that as the production of a good increase, the Oppurnity cost of producing an additional unit rises.