Term
| Normative vs Positive Economics |
|
Definition
| Positive economic analysis concerns what is, whereas normative economic analysis concerns subjective feelings of what ought to be. |
|
|
Term
|
Definition
a) A focus on scientific statements about economic behavior
b) A focus on facts and cause-and-effect relationships
c) A focus on theory development and testing |
|
|
Term
| Law of increasing opportunity cost states that: |
|
Definition
| As production of a particular good rises, the opportunity cost of producing an additional unit rises. |
|
|
Term
|
Definition
| There are limited goods and services. This restricts options and demands choice. Must decide what we have and what we will forgo. |
|
|
Term
|
Definition
| To obtain more of one item, society forgoes the opportunity of getting the next best thing. That sacrifice is the opportunity cost of the choice made. |
|
|
Term
|
Definition
| Individuals look for and pursue opportunities to increase their utility. |
|
|
Term
|
Definition
| The pleasure, happiness, or satisfaction obtained from consuming a good or service. |
|
|
Term
|
Definition
| Comparisons of marginal benefits and marginal costs, usually for decision making. |
|
|
Term
|
Definition
| "Extra," "additional," or "a change in." Most choices or decisions involve changes in status quo. |
|
|
Term
|
Definition
| A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions. |
|
|
Term
|
Definition
| Economic principles are generalizations relating to economic behavior or the economy itself. |
|
|
Term
| Other-things-equal Assumption |
|
Definition
The assumption that factors other than those being considered do not change.
Ceteris paribus. |
|
|
Term
|
Definition
| This part of economics is concerned with decision making by individual customers, workers, households, and business firms. |
|
|
Term
|
Definition
| Examines either the company as a whole or its basic subdivisions or aggregates, such as the government, household, and business sectors. |
|
|
