Term
| Positive Economic Statement |
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Definition
| A statement that can be proved or disproved by reference to facts. |
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Term
| Normative Economic Statement |
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Definition
| Statement that represents an option, which cannot be proved or disproved. |
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Term
| Association-is-causation Fallacy |
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Definition
| the incorrect idea that if two variable are associated in time, one must necessarily cause the other. |
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Term
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Definition
| the incorrect belief that what is true for the individual, or part must necessarily be true for the group, or whole. |
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Definition
| unintended consequences of economic actions that may develop slowly over time as people react to events. |
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Term
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Definition
| the value of the best alternative forgone when an item or activity is chosen. |
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Definition
| a cost that has already been incurred in the past. cannot be recovered, and thus is irrelevant for the present and future economic decisions. |
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Term
| Law of comparative advantage |
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Definition
| the individual, firm, region, or country with the lowest opportunity cost of producing a particular good should specialize in that good. (David Riccardo) |
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Definition
| The ability to produce something using fewer resources than other producers use. (Adam Smith, Wealth of Nations 1776) |
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Definition
| the ability to produce something at a lower opportunity cost than other producers face. |
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Term
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Definition
| The direct exchange of one good for another without using money. |
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Definition
| organizing production of a good into its separate tasks. |
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Definition
| focusing on work effort in a particular product or a single task. |
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Term
| Productions Possibilities Frontier (PPF) |
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Definition
| a curve showing the alternative combinations of goods that can be produced when available resources are used fully and efficiently; [a boundary between inefficient and unattainable combinations.] |
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Term
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Definition
| An increase in the economy's ability to produce goods and services; an upward shift of the production possibilities frontier. **Technology is the main reason for EG** |
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Term
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Definition
| an economic system characterized by the private ownership of resources and the use of prices to coordinate economic activity in unregulated markets. |
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Term
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Definition
| an economic system characterized by the private ownership of some resources and the public ownership of other resources; some markets are unregulated and others are regulated. |
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Term
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Definition
| An economic system characterized by the public ownership of resources and centralized planning. |
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