Lesson1A

A set of vocabulary flashcards covering key terms and definitions from the notes on economics concepts such as scarcity, incentives, rationality, and utility.

Economics

The science (or study) of choice and the allocation of scarce means to alternative uses.

Scarcity

The condition of limited means relative to unlimited ends, forcing choice and allocation.

Ends

Objectives or goals that individuals aim to achieve.

Means

Resources used to achieve ends (time, money, knowledge, labor, capital, land, etc.).

Incentives

Benefits and costs that influence decisions, causing individuals to act to achieve objectives.

Rational action

Acting purposefully to achieve chosen objectives, based on perceived costs and benefits (may be mistaken due to imperfect information).

Homo economicus

The model of the typical rational human whose choices optimize objectives.

Utility

The subjective value or satisfaction derived from a chosen outcome.

Subjective value

Value assessed by the individual based on personal preferences.

Economic goods

Goods that are scarce and have a positive price.

Free goods

Goods with zero price that are not scarce.

Opportunity cost

What you give up when engaging in an activity—the value of the next best alternative.

Next best alternative

The activity you would have pursued if you hadn't chosen the current option.

Lionel Robbins

Economist who defined economics as the science of choice and the study of allocation of scarce means.

Allocation

The process of distributing scarce resources among alternative uses.

Positive price

A price greater than zero, indicating a good is scarce.

Ends and means

Ends are goals; means are the resources used to achieve those goals.

Time, money, and knowledge (means)

Examples of limited resources that serve as the means to ends.

Dismal science

A label for economics attributed to Thomas Malthus, highlighting its focus on scarcity and limits.

Malthus

Thomas Malthus, economist associated with the term 'dismal science'.