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11 terms

Economics ACADEC

STUDY
PLAY
Economics
study of how individuals make choices about how to allocate and distribute scare resources and how they interact with each other
scarcity
inescapable because resources are limited and human desires are insatiable
opportunity cost
what we chose is what we must give up by making that choice
economic models
to understand economic analysis to describe economic phenomena and make predictions about what will happen under particular circumstances`
trade
makes everyone involved better off
rationality
compare benefits and opportunity costs of each action that yields the greatest net benefit
positive economics
describe economic phenomena and make predictions about what will happen under particular circumstances
normative economics
to evaluate the merits of different situations
pareto efficiency
only way anyone can be made better off is by reducing the well-being of one or more other people
microeconomics
The study of the economic behavior and decision making of small units, such as individuals, families, and businesses.
macroeconomics
the branch of economics that studies the overall working of a national economy