Introduction to Engineering Economics and IPR - Lecture 1 Vocabulary

A complete list of vocabulary flashcards defining key economic terms, schools of thought, and conceptual definitions from Lecture 1.

Oikonomia

The Greek word meaning 'household' from which the term 'Economics' originated.

Economics

The science of making choices in the presence of scarcity, addressing unlimited human wants and relatively scarce means.

Microeconomics

The branch of economics that studies individual economic units, partial equilibrium analysis, relative prices, and the mechanism of allocating given resources.

Macroeconomics

The branch of economics that studies aggregate economic units, general equilibrium analysis, absolute prices, general price levels, and national income.

Partial Equilibrium Analysis

An economic analysis used in microeconomics that seeks to determine price and output in an industry independent of those in other industries.

General Equilibrium Analysis

An economic analysis used in macroeconomics that considers how disturbances in equilibrium price and quantity in one market cause disturbances across all other markets.

Mercantilism

An economic doctrine dominant in Europe between the 16th and mid-18th centuries that favored trade surpluses, accumulation of gold and silver reserves, export of manufactured goods, and low wage policies.

Physiocracy

An 18th-century French school of economic thought centered on the rule of nature and agriculture, viewing real wealth as consumable commodities generated from agricultural advancement rather than money.

Tableau Economique

A diagram developed by Francois Quesnay to represent the circular flow and distribution of wealth within an economic system.

Laissez Faire

An economic doctrine advocating no government intervention in economic affairs, termed by Vincent de Gournay and adopted from Francois Quesnay.

Classical School

A body of economic thought existing between 1750 and 1850 dealing with capitalist economies, emphasizing Laissez Faire, division of labor, budget surpluses, and long-run full employment.

Say's Law

An economic proposition formulated by J.B. Say stating that supply creates its own demand.

Neo-Classical School

An economic movement beginning in the 1870s pioneered by Marginalists that introduced marginal utility, marginal product, and marginal cost analysis to understand economic systems.

Marginalist Productivity Theory of Income Distribution

A theory stating that in a competitive economy, workers are paid the marginal product of labor and capitalists are paid the marginal product of capital.

Keynesian School

An economic school of thought pioneered by J.M. Keynes during the Great Depression advocating government intervention, budget deficits, and short-run demand management to achieve full employment.

Monetarism

A Post-Keynesian school led by Milton Friedman arguing that monetary forces have no impact on real variables such as aggregate real output and employment.

Institutionalism

A Post-Keynesian economic perspective led by Veblen, Galbraith, and Myrdal emphasizing the role of social and institutional norms in determining economic outcomes.

Supply-side Economics

An economic theory focused on influencing the supply of labor and goods through tax and benefit cuts as incentives, incorporating concepts like the Laffer curve.

New Classical School

A Post-Keynesian school led by Edward Prescott focusing on fluctuations as movements in the natural level of output and natural unemployment rate.

New Keynesians School

A Post-Keynesian school associated with Akerlof and Mankiw focusing on market imperfections and nominal rigidities that cause deviations in output from its natural level.

Science of Wealth

The classic definition of economics associated with Adam Smith and J.B. Say, defining economics as the acquisition, accumulation, and expenditure of wealth.

Science of Material Well-being

Alfred Marshall's definition of economics as the study of mankind in the ordinary business of life, examining actions connected with attaining and using material requisites of well-being.

Science of Pleasure and Pain

William Stanley Jevons's concept of economics as a calculus aimed at the maximization of pleasure and minimization of pain.

Science of Choice Making

Prof. Lionel Robbins's 1931 definition of economics as the science studying human behavior as a relationship between ends and scarce means which have alternative uses.

Positive Science

An approach to science that analyzes cause-and-effect relationships between variables without passing value judgments, stating 'what it is'.

Normative Science

An approach to science that involves value judgments and prescriptive statements, describing 'what ought to be'.