Shared Flashcard Set

Details

Chapter 1
Introducting the Economic Way of Thinking
33
Economics
Undergraduate 1
01/25/2015

Additional Economics Flashcards

 


 

Cards

Term
Scarcity
Definition
The condition in which human wants are forever greater than the available supply of time, goods, and resources.
Term
Resources
Definition
The basic categories of inputs used to produce goods and services. Resources are also called factors of production. Economists divide resources into three categories: land, labor, and capital.
Term
Land
Definition
Any natural resource provided by nature that is used to produce a good or service.
Term
Labor
Definition
The mental and physical capacity of workers to produce goods and services.
Term
Entrepreneurship
Definition
The creative ability of individuals to seek profits by taking risks and combining resources to produce innovative products.
Term
Capital
Definition
A human-made good used to produce other goods and services.
Term
Economics
Definition
The study of how society chooses to allocate its scarce resources to the production of goods and services to satisfy unlimited wants.
Term
Macroeconomics
Definition
The branch of economics that studies decision making for the economy as a whole.
Term
Microeconomics
Definition
The branch of economics that studies decision making by a single individual, household, firm, industry, or level of government.
Term
Model
Definition
A simplified description of reality used to understand and predict the relationship between variables.
Term
Ceteris paribus
Definition
A Latin phrase that means while certain variables change, “all other things remain unchanged”
Term
Positive economics
Definition
An analysis limited to statements that are verifiable.
Term
Normative economics
Definition
An analysis based on value judgment.
Term
Scarcity
Definition
the fundamental economic problem that human wants exceed the availability of time, goods, and resources. Individuals and society therefore can never have everything they desire.
Term
Resources
Definition
factors of production classified as land, labor, and capital. Entrepreneurship is a special type of labor. An entrepreneur seeks profits by taking risks and combining resources to produce innovative products.
Term
Economics
Definition
the study of how individuals and society choose to allocate scarce resources to satisfy unlimited wants. Faced with unlimited wants and scarce resources, we must make choices among alternatives.
Term
Macroeconomics
Definition
applies an economy-wide perspective that focuses on such issues as inflation, unemployment, and the growth rate of the economy.
Term
Microeconomics
Definition
examines individual decision-making units within an economy, such as a consumer’s response to changes in the price of coffee and the reasons for changes in the market price of personal computers.
Term
Models
Definition
simplified descriptions of reality used to understand and predict economic events. An economic model can be stated verbally or in a table, a graph, or an equation. If the event is not consistent with the model, the model is rejected.
Term
Ceteris paribus
Definition
holds “all other factors unchanged” that might affect a particular relationship. If this assumption is violated, a model cannot be tested. Another reasoning pitfall is to think that association means causation.
Term
Positive economics
Definition
Testable Statements, Often is expressed as an if-then statement.
Term
Normative economics
Definition
Based on value judgments or opinions and uses words such as good, bad, ought to, and should.
Term
Factors of Production
Definition
Land (natural resources), labor (human capital, entrepreneurship), and capital (constructed inputs such as factories).
Term
direct relationship
Definition
A positive association between two variables. When one variable increases, the other variable increases, and when one variable decreases, the other variable decreases.
Term
inverse relationship
Definition
A negative association between two variables. When one variable increases, the other variable decreases, and when one variable decreases, the other variable increases.
Term
slope
Definition
The ratio of the change in the variable on the vertical axis (the rise or fall) to the change in the variable on the horizontal axis (the run).
Term
independent relationship
Definition
A zero association between two variables. When one variable changes, the other variable remains unchanged.
Term
A horizontal or vertical line
Definition
What is used to illustrate an independent relationship between two variables?
Term
direct relationship
Definition
occurs when two variables change in the same direction
Term
inverse relationship
Definition
occurs when two variables change in opposite directions
Term
independent relationship
Definition
occurs when two variables are unrelated
Term
Slope
Definition
the ratio of the vertical change (the rise or fall) to the horizontal change (the run). The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.
Term
three-variable relationship
Definition
depicted by a graph showing a shift in a curve when the ceteris paribus assumption is relaxed and a third variable (such as annual income) not on either axis of the graph is allowed to change
Supporting users have an ad free experience!