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Economics
The study of choices
Scarcity
a limited amount of something/ leading to not always get what you want or your preference
Incentives
what motivates you to do/not do things
Positive Incentive
things you want to motivate you
Negative Incentive
things you don't want happening that motivate you to do something
Opportunity Costs
What have you lost for the cost of your opportunity
Specialization
When you focus on one to a few things, and become good at it, it becomes a specialization.
Confirmation bias
Taking facts and evidence provided that ONLY Supports your opinion. (selective searching for evidence/myside bias)
Cognitive inertia
being unwilling to change one’s thought pattern when given new information (disregarding new information because of your own biased opinion)
Wishful Thinking
Wanting things to be a certain way (similar to over-optimism/easily excited)
Recency Bias
paying more attention to recent events rather than past ones
Groupthink
feeling obligated to follow the opinions or actions of a group.
Source Credibility Bias
rejecting someone’s argument as you don't like the person or group presenting it. Or accepting an argument as you like the person or group presenting it
Slippery Slope
Viewing a decision as one that follows or continues a series of similar decisions.
Attribution asymmetry
Attributing one’s own successes to their personality traits, while attributing one’s failures to external factors like luck. Also applies conversely to other people.
What are the three economic questions?
What, who, and for whom to produce?
Traditional Economic System
Historical economic system; based on customs, history, and beliefs, doing things based on tradition. Hunting, gathering, farming, fishing; relying on agriculture.
Example of traditional economic system
Ella farms, but Niyanthri has land. They trade their agriculture.
feudalist economic system
Economic system relying on social hierarchy (ladder). “Kings” make economic decision
Example of feudalist economic system
Ella and Niyanthri are queens, Viraj is a peasant. Viraj works for the queens on the farms. The queen's tell peasant Viraj what to do. Viraj produces the food and lives a sad life as his resources are given to those higher up on the hierarchy.
Mercantilism
To sum it up, mercantilism is a system where nations try to get richer by controlling trade and accumulating wealth, usually at the expense of other nations.
What are the three modern economic systems
Market, mixed, and planned
Market
Freedom and choice to all citizens.
Mixed
mix of democracy and controlled economy. Most countries use this system of gov.
Planned/Command
Planned and controlled economy where the government controls the economy.
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