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chapter 1
An Economic Way of Thinking
28
Economics
9th Grade
01/27/2009

Additional Economics Flashcards

 


 

Cards

Term

 

 

 

ECONOMICS

Definition

 

 

 

The study of how people choose to use their limited resources to satisfy their unlimited wants

Term

 

 

 

ECONOMY

Definition

 

 

 

 

A system used to manage limited resourses for the production, distribution, and consumption of goods and services

Term

 

 

 

Positive Economics

Definition

 

 

 

The branch of economics that uses objective analysis to find out how the world works.  The goal is to describe how thinks are.

Term

 

 

 

Normative Economics

Definition

 

 

 

The branch of economics that applies value judgements to data in order to recommend actions or policies.  The goal is to advise how things ought to be done.

Term

 

 

 

Scarcity

Definition

 

 

 

The condition that results because people have limited resources but unlimited wants.

Term

 

 

 

Tradeoff

Definition

 

 

 

The exchange of one benefit or advantage for another that is thought to be better.

Term

 

 

 

 

Cost Benefit Analysis

Definition

 

 

 

A way to compare the costs of an action with the benefits of that action.  If benefits exceed costs, then the action is worth taking.

Term

 

 

 

Incentive

Definition

 

 

 

Any factor that encourages or motivates a person to do something.  Prices, taxes, and laws create incentives that influence how people behave.

Term

 

 

 

Economic Enigmas

 

 

 

Definition

 

 

 

Puzzles or riddles that might be explained through an economic analysis.

Term

 

 

 

Enigma

Definition

 

 

 

Obscure or hard to understand

Term

 

 

 

Resource

 

 

 

Definition

 

 

 

Anything used to produce an economic good or service.

Term

 

 

 

Microeconomics

Definition

 

 

 

Economic decisions made by individuals, households, and businesses.

Term

 

 

 

Macroeconomics

Definition

 

 

 

Economics focusing on the working of the economy as a whole.

Term

 

 

 

Scarcity-Forces Tradeoffs Principle

Definition

 

 

 

Limited resrouces force people to make choices and face tradeoffs- also known as the "no free lunch principle"- every choice, even a free lunch, involves tradeoffs.

Term

 

 

 

Costs

Definition

 

 

 

What you spend in money, time, and effort or other sacrifices

Term

 

 

 

Benefits

Definition

 

 

 


What you gain from something in terms of money, experience, or other improvements in your situation. 

Term

 

 

 

Costs Versus Benefits Principle

Definition

 

 

 

People choose something when the benefits of doing so are greter than the cost.

Term

 

 

 

Market

Definition

 

 

 

Any arrangement that brings buyers and seller together to do business with each other.

Term

 

 

 

Market Coordinate Trade Principle

Definition

 

 

 

Markets usually do better than anyone or anything else at coordinating exchanges between buyers and sellers.

Term

 

 

 

Future Consequences Count Principle

Definition

 

 

 

Decisions made today have consequences not only for tody but in the future.

Term

Scientific Method

Definition

  

 

 

Posing a question, developing a hypothesis, conducting studies, gathering information, analyzing information, and evaluating the hypothesis

Term

 

 

 

Data

Definition

 

 

 

Factual information

Term

 

 

 

Graph

Definition

 

 

 

Visual representation between 2 given sets of data

Term

 

 

 

Variable

Definition

 

 

 

Quantity or data can vary or change

Term

 

 

 

Axis

Definition

 

 

 

Each of the 2 perpendicular lines of a co-ordinate system- X axis is the horizontal line- Y axis is the vertical line.

Term

 

 

 

Curve

Definition

 

 

 

Any line representing data points plotted on a graph- it doesn't have to be curved.

Term

 

 

 

Rational Behavior Model

Definition

 

 

 

A tool for understading human behavior- people make decisions in ways that serve their own interests without taking into account the well being of others.

Term

 

 

 

Economic Model

 

 

 

Definition

 

 

 

A simplified representation of reality that allows economists to focus on the efforts on one change at a time.  It can be an equation, computer program, diagram, or witten description. 

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