Term
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Definition
The complete costs of production;
Fixed costs + Variable Costs |
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Term
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Definition
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Term
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Definition
Cost of producing one more good;
Change in Total Cost / Change in Quantity |
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Term
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Definition
| Change in total revenue / change in quantity |
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Term
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Definition
| Total Revenue - Total Cost |
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Term
| Basic Principles of Economics |
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Definition
1. Everything has a cost
2.People choose for good reasons
3.Incentives matter
4.People create economic systems to influence choices and incentives
5.People gain from voluntary trade
6.Economic thinking is marginal thinking
7. The value of a good or service is affected by people's choices
8.Economic actions create secondary effects
9.The test of a theory is its ability to predict correctly |
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Term
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Definition
| The study f how to allocate scarce resources among competing uses |
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Term
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Definition
The study of aggregate economic behavior
(The economy as a whole, total) |
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Term
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Definition
| The study of individual(both consumers and producers) behavior in the economy |
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Term
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Definition
| Assumes that all other variables except those under immediate consideration are held constant for a particular analysis |
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Term
| List the main logical fallacies associated with economic analysis |
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Definition
Fallacy of composition
Post Hoc Fallacy
Correlation v. Causation |
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Term
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Definition
The analysis of facts or data to establish scientific generalizations about economic behavior
(What is) |
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Term
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Definition
The part of economics involving value judgments about what the economy should be like
(What should be) |
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Term
| Purpose and weaknesses of economic models |
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Definition
They predict economic behavior
They only suggest economic behavior. |
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Term
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Definition
| The fact that available resources are insufficient to satisfy all desired uses thereof |
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Term
| Factors of production and their incomes |
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Definition
Labor(Wages)
Land(Rent)
Capital(Interest)
Entrepreneurship(Profit) |
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Term
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Definition
| The most desired goods or services that are foregone in order to obtain something else |
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Term
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Definition
| Money and money related loss |
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Term
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Definition
| The next best use of resources |
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Term
| How production possibilities curves illustrate issues of scarcity, choice, and opportunity cost |
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Definition
| Shows the various combinations of final goods or services that could be produced in a given time period with the available resources and technology |
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Term
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Definition
Maximum output from the resources used in production;
Getting the most from what you got;
Using that factors of production to their full potential |
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Term
| The law of increasing opportunity Costs |
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Definition
The presumption is that opportunity costs increase as you give up one good to make another because resources are not perfectly transferable
(ex. Avocados and Grapes) |
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