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Details Title: Chapter 1 Key Terms Description: Vocabulary for Chapter 1 of CASE & FAIR Total Flash Cards: 31 Created: 01/20/2007 19:21:22	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term economics Definition study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided Term opportunity cost Definition the best alternatve that we give up when we make a choice / decision Term scarce Definition limited Term marginalism Definition process of analyzing the additional or incremental costs or benefits arising from a choice or decision Term sunk costs Definition costs that cannot be avoided, regardless of what is done in the future, because they have already been incurred Term efficient market Definition a market in which profit opportunities are eliminated almost instantaneously Term Industrial Revolution Definition the period in England during the late 18th and early 19th centuries, in which new manufacturing technologies and improved transportation gave rise to (1) the modern factory system (2) a massive movement of population from country to the cities Term microeconomics Definition branch of economics that examines the functioning of INDVIDUAL industries and the behavior of INDIVIDUAL decision-making units––that is, business firms and households Term macroeconomics Definition the branch of economics that examines the economics behavior of AGGREGATES––income, employment, output, and so on––on a national scale Term positive economics Definition an approach to economics that seeks to understand behavior and the operation of systems WITHOUT making judgments; describes what exists and how it works Term normative economics Definition an approach to economics that analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action; aka POLICY ECONOMICS Term descriptive economics Definition the compilation of data that describe phenomena and facts Term economic theory Definition a statement or set of related statements about cause and effect, action and reaction Term model Definition a format statement of a theory, usually a mathematical statement of a presumed relationship between 2+ variables Term variable Definition a measure that can change from time to time or from observation to observation Term Ockham's razor Definition the principle that irrelevant detail should be cut away Term ceteris paribus / all else equal Definition a device used to analyze the relationships between 2 variables while the values of other variables are held unchanged Term post hoc, ergo propter hoc Definition "after this (in time), therefore because of this"; a common error made in thinking about causation––if Event A happens before Event B, it is not necessarily true that A casued B Term fallacy of composition Definition the erroneous belief that what is true for a part is necessarily true for the whole Term empirical economics Definition the collection and use of data to test economic theories Term efficiency Definition in economics, allocative efficiency; an efficient economy is one that produces what people want at the least possible cost Term equity Definition fairness Term economic growth Definition an increase in the total output of an economy Term stability Definition a condition in which national output is growing steadily, w/ low inflation and full employment of resources Term Cartesian coordinate system Definition method of graphing 2 variables that makes use of 2 perpendicular lines against which the variables are plotted Term graph Definition a 2D representation of #s or data Term negative relationship Definition a relationship between 2 variables, X and Y, in which a decrease in X is associated with an increases in Y, and vice versa Term origin Definition on a Cartesian coordinate system, the point at which the horizontal and vertical axes interact Term positive relationship Definition a relationship between 2 variables, X and Y, in which a increase in X is associated with an increases in Y, and vice versa Term slope Definition measurement that indicates whether the relationship between variables is positive or negative and how much of a response there is in Y (variable on the vertical axis) when X (variable on the horizontal axis) changes Term time series graph Definition graph illustrating how a variable changes over time