Chapter 1: An Introduction to the Economic Way of Thinking

0.0(0)
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Get a hint
Hint

Scarcity

Get a hint
Hint

occurs when we have fewer resources than we have uses for those resources . '

Get a hint
Hint

Economic tools

Get a hint
Hint

help us to understand and analyse choices and their implications.

Card Sorting

1/15

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

16 Terms

1
New cards

Scarcity

occurs when we have fewer resources than we have uses for those resources . '

2
New cards

Economic tools

help us to understand and analyse choices and their implications.

3
New cards

Decision makers

weigh the costs and benefits associated with any choice in order to maximize the value of some objective.

4
New cards

Macroeconomics deals

with the choices we make as a society, such as how much tax to pay and how many progran1s the government should sponsor.

5
New cards

Utility

is a synonym tor satisfaction or happiness and describes the benefit individuals get from their choices.

6
New cards

Ceteris paribus

is a Latin term that means "all other things remaining constant "or "all else equal ..

7
New cards

data points

By convention, the term "curve "is used to describe the connected , regardless of whether the curve is a straight line or not.

8
New cards

Profit

is the difference between the earnings that a firm receives from selling its good or service and the costs incurred to produce the good or service.

9
New cards

Analysis

of economic choices often involves relaxing the ceteris paribus assumption in a series of steps.

10
New cards

Microeconomics deals

with the choices individuals, households, or businesses make, the decision for both spouses in a family to have paid employment, and the decisions firms make when hiring workers.

11
New cards

Graphs

are visual representations of relationships between two or more variables.

12
New cards

Sunk costs

are irrelevant when making decisions at the margin.

13
New cards

Scarcity

forces us to allocate our scarce resources among the many uses for them, and we have to make choices or trade- offs between these various uses.

14
New cards

Profit

is the benefit that firms get from their choices.

15
New cards

The law of diminishing marginal benefits

as more and more of an activity is done, the marginal benefits derived from the activity lend to diminish

16
New cards

The law of marginal cost

as more and more of an activity is done, the marginal costs of the activity tend to increase