Introduction to Economics

These flashcards cover key concepts and definitions relevant to the field of economics as discussed in the lecture notes.

Economics

A social science that deals with the study of human decision making given a set of constraints.

Scarce Resources

Resources that are limited relative to the wants, requiring rationing and allocation.

Microeconomics

The branch of economics that focuses on individual decision makers, such as firms and consumers.

Macroeconomics

The branch of economics that studies the overall economy, including GDP, inflation, and unemployment.

Positive Economics

The branch of economic analysis that describes how the economy actually works, focusing on objective analysis.

Normative Economics

The branch of economics that makes prescriptions about how the economy should work, based on subjective analysis.

Economic Model

A simplified representation of a real situation used to better understand complex real-life situations.

Ceteris Paribus

A Latin phrase meaning 'all other things held constant,' used in economics to isolate the effects of one variable.

Opportunity Cost

The value of the next best alternative when making a decision.

Benefit-Cost Analysis

An approach for making decisions by comparing the benefits and costs associated with different actions.