Ch 2 - Discipline of Economics

PPC

Graphical representation of the best possible combination of two products a country can produce if it uses up all its resources efficiently.

Theories

to understand behavior are proved via a full procedure of hypothesis and testing.

Land

All natural resources in general including oceans, mineral deposits, crude oil, etc.

Macroeconomics

we consider the big picture- the nations economy as a whole.

Capital

A productive equipment or machinery (in economic terms only)

Focus

is directed at the roles households and firms play and how their decision- making and allocation of resources impact the overall economy.

Labor

All human attributes involved in a task, service, or function, that can play a role in the productivity of the process e.g.

Comparative advantage

means the ability of one country /nation to produce goods /services at a lower opportunity cost than another country /nation.

Opportunity cost

This is the cost we forgo or sacrifice, to opt for another choice.

Positive Economics

this approach to economics is based on facts and figures.

Absolute advantage

is producing goods /services more efficiently, using fewer inputs.

Microeconomics

filters our scope to individuals in an economy while keeping the overall economy in mind

Positive Economics

this approach to economics is based on facts and figures

Normative Economics

this approach to economics is based on assumptions

Land

All natural resources in general including oceans, mineral deposits, crude oil, etc

Labor

All human attributes involved in a task, service, or function, that can play a role in the productivity of the process e.g

Capital

A productive equipment or machinery (in economic terms only)

Opportunity cost

This is the cost we forgo or sacrifice, to opt for another choice

PPC

Graphical representation of the best possible combination of two products a country can produce if it uses up all its resources efficiently