Economics Lecture Concepts & Principles

Vocabulary flashcards generated from introductory economics lecture notes covering administrative procedures, core economic principles, behavioral economics, efficiency, and growth models.

GeoFence

A location-based feature in Top Hat used to track student attendance inside the classroom.

Scarcity

The fundamental economic problem arising from unlimited human wants competing for limited resources.

Microeconomics

The study of economics focused on individual decision-making, firm-level decisions, and specific markets.

Macroeconomics

The study of large-scale economic factors and broad issues affecting the entire economy, such as inflation, unemployment, and Federal Reserve policy.

Bounded Rationality

A concept in behavioral economics stating that decision-making rationality is limited by cognitive constraints, available information, and time.

Loss Aversion

A behavioral economic principle describing the tendency for people to strongly prefer avoiding losses over gaining equivalent rewards.

Satisficers

Decision-makers who choose solutions that meet an acceptable threshold rather than seeking the absolute optimal outcome.

Opportunity Cost

The value of the next best alternative that is given up when making a choice.

Intertemporal Choice

Economic decision-making involving trade-offs made across different time periods, such as balancing immediate consumption against future savings.

Marginal Analysis

An examination of the additional benefits (marginal benefit) and additional costs (marginal cost) incurred when taking one extra step or producing one more unit.

Positive Economics

Economic analysis based on objective, factual, and testable statements that can be proven or disproven with data.

Normative Economics

Economic analysis based on subjective values, personal judgments, and opinions regarding what ought to be.

Ceteris Paribus

A Latin phrase meaning 'all else being equal,' used in economic modeling to isolate the effect of a single variable by holding other variables constant.

Factors of Production

The four foundational resource categories used to produce goods and services: land, labor, capital, and entrepreneurship.

Production Possibility Curve (PPC)

A graphical model representing the trade-offs and maximum output combinations of two goods an economy can produce given fixed resources.

Production Efficiency

A condition reached when output is on the Production Possibility Curve, meaning producing more of one good requires producing less of another.

Allocative Efficiency

A state of resource allocation where resources are distributed to maximize societal benefit, occurring where marginal benefit equals marginal cost.

Comparative Advantage

The ability of an individual or nation to produce a specific good or service at a lower opportunity cost than others.

Pareto Improvement

An economic action or trade that leaves at least one party better off without making any other party worse off.

Per Worker Production Function

An economic model depicting the mathematical relationship between capital per worker and output per worker.

Diminishing Returns

The principle stating that as additional units of capital are added while holding other inputs constant, the resulting increase in marginal output gradually decreases.