Term
| Observations are Important Because... |
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Definition
| The lead to theories; theories can be tested and become more or less confident |
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Term
| Economic scientists study.. |
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Definition
| events and natural experiments |
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Term
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Definition
| simplify situations for easier understanding |
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Term
| Economists use models to... |
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Definition
| simplify reality to better our understanding |
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Term
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Definition
| a visual model of the economy that shows how dollars flow through markets among households and firms . |
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Term
| Production Possibilities Frontier |
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Definition
A graph that shows the combination of output that the economy can possibly produce given the available factors of production and the available production technology.
Also, shows the opportunity costs of one good measured against another. |
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Term
| An economy is efficient if.. |
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Definition
| It gets all it can from resources |
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Term
| An economy is inefficient if... |
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Definition
| if produces less that it could with the provided resources |
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Term
| Economists are policy advisers because... |
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Definition
| they are asked to recommend policies to improve economic output. |
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Term
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Definition
| Claims to attempt to describe the world. How the world works. |
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Term
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Definition
| Claims that attempt to prescribe how the world should be. Often contain personal ethics, religion, philosophy, etc. |
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Term
| Why economists' advise is not always followed... |
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Definition
| because it's only one part of the decision making process. |
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Term
| Economics disagree because... |
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Definition
| of different hunches about validity, or the size of important things that measure how economic variables are related. |
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Term
| Different normative views stem from... |
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Definition
| different positive views. |
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