Introduction to Economics I: Economics as a Social Science

Vocabulary practice flashcards covering fundamental concepts, definitions, and course details from Lecture 1: Economics as a Social Science.

Economic Subsystem

The subsystem of a society that encompasses the production and distribution of goods and services.

Spontaneous Order

A higher-level order within a society—such as a market—that emerges from individual actors pursuing their own interests, even if they do not recognize or intend to form a system.

Karl Polányi

Hungarian-born sociologist ($1886-1964$) who distinguished between the substantive (broader) meaning and formal (narrower) meaning of economic activity.

Substantive Meaning of Economic Activity

The broader definition of economic activity identified by Karl Polányi, referring to the production of goods and services to meet the material needs of people in all societies.

Formal Meaning of Economic Activity

The narrower definition of economic activity identified by Karl Polányi, referring to rational calculations (optimization) and decision-making by actors seeking the best alternative when facing limited options.

Market Mechanism

The process in market economies whereby prices are determined by the simultaneous decisions of actors on both the supply and the demand sides.

Market Economy

An economic system in which the fundamental questions of economics (what to produce, how to produce, how to allocate productive resources, and how to distribute goods and services) are predominantly decided by the market.

Producer Motivation in Market Economies

The driving motivation of producers in a market economy, which is primarily profits.

Consumer Motivation in Market Economies

The motivation of consumers in a market economy, which is expressed through their utilities.

Economic Models

Abstractions used to understand observations or experiences and express principles applicable to various problems, deriving their power from simplicity and capturing the essence of the problem.

Economic Laws

Principles such as the law of demand, law of supply, and law of diminishing returns that function as rules of thumb to provide orientation on expectations, rather than absolute predictions like natural science laws.

Mainstream Economics

The body of models and approaches appearing in widely used textbooks that have demonstrated greater predictive power and explanatory accuracy among diverse perspectives in social sciences.

Microeconomics

The branch of economics that deals with the behavior, incentives, and choices of individual actors within the economy.

Macroeconomics

The branch of economics that examines the functioning and performance of the economy as a whole.

Principles of Economics (Course Textbook)

The primary course textbook authored by N. Gregory Mankiw, published in its Ninth Edition ($2021$) by Cengage Learning, Inc.

Course Grading Scale

The point thresholds for final grades: $0-39$ points for fail ($1$), $40-49$ points for pass ($2$), $50-59$ points for satisfactory ($3$), $60-69$ points for good ($4$), and $70-80$ points for excellent ($5$).