Economic Methodology and the Economic Problem

Flashcards covering key vocabulary and concepts from Chapter 1.1 on Economic Methodology and the Economic Problem.

Economics

The study of human behavior in making decisions to allocate scarce resources.

The Basic Economic Problem

The fundamental challenge of deciding what to produce, how to produce it, and for whom to produce it.

Ceteris Paribus

A Latin term meaning 'all other things remaining equal', used by economists to isolate the effect of one variable by assuming other factors remain constant.

Economic Models

Simplified frameworks based on assumptions used by economists to explain and predict economic behavior.

Scientific Methodology in Economics

A process of formulating hypotheses, testing them against gathered data, and accepting or modifying hypotheses to build economic theories.