Principles of Economics - Chapter 1: The Scope and Method of Economics

Fill-in-the-blank practice flashcards covering fundamental economic concepts, policy goals, branches and fields of economics, economic methods, and graphical interpretation from Chapter 1.

Economics is defined as the study of how individuals and societies choose to use the __________ resources that nature and previous generations have provided.

scarce

The key word in the core definition of economics is __________.

choose

Economics is classified as a behavioral, or __________, science.

social

The three fundamental concepts that form the economic way of thinking are opportunity cost, marginalism, and __________.

efficient markets

Opportunity cost is defined as the best alternative that we __________ when we make a choice or decision.

forgo, or give up

Analyzing the additional or incremental costs and benefits arising from a choice or decision is known as __________.

marginalism

A market in which profit opportunities are eliminated almost instantaneously is called a(n) __________.

efficient market

The four main goals of economic policy used to judge economic outcomes are efficiency, equity, growth, and __________.

stability

The economic goal of __________ means using resources in a way that maximizes output and minimizes waste, so no one can be made better off without making someone else worse off.

efficiency

The economic policy goal of __________ refers to the fair distribution of economic resources and opportunities among individuals or groups in society.

equity

Economic growth is measured as the increase in a country's total production of goods and services, or __________, over time.

GDP

Maintaining steady economic conditions—low inflation, low unemployment, and avoiding large fluctuations in output or prices—defines the economic goal of __________.

stability

The branch of economics that examines the functioning of individual industries and the behavior of decision-making units like households and firms is __________.

microeconomics

The branch of economics that examines the aggregate economic behavior of income, employment, and output on a national scale is __________.

macroeconomics

In behavioral economics, small obstacles like paperwork, effort, and time that make it harder to act are referred to as __________.

friction

Systematic mistakes in thinking that affect economic decisions, such as a strong preference for immediate rewards, are called __________.

cognitive biases

An approach to economics that seeks to understand behavior and systems without making judgments, describing what exists and how it works, is __________.

positive economics

An approach to economics that analyzes outcomes of economic behavior, evaluates them as good or bad, and prescribes courses of action is __________.

normative economics

A formal statement of a theory, usually expressed as a mathematical relationship between two or more variables, is called a(n) __________.

model

The principle stating that irrelevant detail should be cut away when formulating economic theories is called __________.

Ockham's razor

The Latin term __________ is used in economics to mean holding all other variables constant or unchanged.

ceteris paribus

The logical error of assuming that because Event A occurred before Event B, Event A must have caused Event B is known as __________.

post hoc, ergo propter hoc

The collection and use of data to test economic theories is known as __________ economics.

empirical

The late eighteenth and early nineteenth century period in England that gave rise to the modern factory system and urban migration is the __________.

Industrial Revolution

The point at which the horizontal ($X$) and vertical ($Y$) axes intersect on a graph is called the __________.

origin

The formula used to calculate the slope between two coordinate points on a graph is __________.

$$\frac{\Delta Y}{\Delta X} = \frac{Y_2 - Y_1}{X_2 - X_1}$$

The straight line graph depicted here illustrates a __________ slope.

positive

The straight line graph depicted here illustrates a __________ slope.

negative

The curve in this graph demonstrates a slope that is __________.

positive and decreasing

The curve in this graph demonstrates a slope that is __________.

positive and increasing

The curve in this graph demonstrates a slope that is __________.

negative and increasing

The curve in this graph demonstrates a slope that is __________.

negative and decreasing

The curve in this graph exhibits a slope that is __________.

positive, then negative

The curve in this graph exhibits a slope that is __________.

negative, then positive