Term
| What is the equation of a line? What do all of the variables represent? |
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Definition
| y=mx+b, where y is the dependent variable, m is the slope of the line, x is the independent variable and b is the y intercept. |
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Term
what is scarcity?
what is efficiency? |
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Definition
scarcity is the term used to describe a situation where the resources available are less than the amt. of resources desired.
Efficiency denotes the most effective use of a society's resources, but it does not account for equity. |
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Term
| what is the post hoc fallacy? |
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Definition
| the post hoc fallacy occurs when we assume that because one event occured before another that the first event caused the second. |
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Term
| what happens when an economist fails to "hold other things constant"? |
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Definition
| It can lead to the incorrect conclusion. When an economist asks a question they should try to isolate the affect of a single variable at a time. Trying to discern the affect of a single variable in a system that is being acted on by lots of variables means that the real affect can't be isolated. |
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Term
| what is the difference between positive economics and normative economics? |
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Definition
| Positive economics studies the economy as it is. It is concerned with facts rather than matters of equity. Normative economics recognizes that there are issues of equailty that can be addressed by economics, and that different people will have different defitions of equal. There is room for moral debate in normative economics. If you get stuck remember to ask yourself "are you positive?" if your answer isn't a fact or a law then it's a matter for normative economics. |
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Term
| what are inputs and outputs? |
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Definition
inputs are commodities or services that are used to produce other goods and services.
outputs are the final goods and services meant for consumption. |
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Term
| what are the three broad groups of factors of production? |
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Definition
land- which can be thought of as natural resources.
labor- the human time spent working.
capital- resources from the durable goods of an economy. this includes computers, machines, trucks and buildings (list not exclusive). |
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