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Definition
| the study of how human beings coordinate their wants and desires, give the decision-making mechanisms, social customs, and political realities of the society |
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| the goods available are too few to satisfy individuals' desires |
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| Limiting people's wants and increasing the amount of work individuals are willing to do to fulfill those wants |
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| a method of reasoning in which one deduces a theory based on a set of almost self evident principles |
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| a method of reasoning in which one develops general principles by looking for patterns in the data |
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| addressing almost all issues using a cost/benefit approach |
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| the additional cost to you over and above the costs you have already incurred |
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| costs that have already been incurred and cannot be recovered |
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| the additional benefit above what you've already derived |
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Definition
if MB exceed MC, do it.
if MC exceed MB, don't do it. |
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| the benefit that you might have gained from choosing the next-best alternative |
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| the necessary reactions to scarcity |
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| an economic force that is given relatively free rein by society to work through the market |
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| the price mechanism, the rise and fall of prices that guides our actions in a market |
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| a method of analysis that uses a combination of inductive methods and deductive methods |
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| a framework that places the generalized insights of the theory in a more specific contextual setting (ie an example) |
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| a commonly held economic insight stated as a law or general assumption |
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| a branch of economics that studies the economy through a controlled laboratory experiment |
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| naturally occurring events that approximate a controlled experiment where something has changed in one place but has not changed somewhere else |
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| propositions that are logically true based on the assumptions in a model |
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| policy rules that conclude that a particular course of action is preferable |
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| achieving a goal as cheaply as possible |
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| a market economy, through the price mechanism, will tend to allocate resources efficiently |
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| the study of individual choice, and how that choice is influenced by economic forces (bottom up) |
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| the study of the economy as a whole (top down) |
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| actions (or inaction) taken by government to influence economic actions |
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| leaves values and options out of an economic decision/statement |
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Definition
| the study of what is, and how the economy works (pure theory) |
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| the study of what the goals of the economy should be |
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| Art of economics (aka political economy) |
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Definition
| the application of the knowledge learned in positive economics to the achievement of the goals one has determined in the normative economics |
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