Chapter 1 Flashcards
Economics
The social science that studies the choices that individuals, businesses, governments and entire societies make as they cope with scarcity and the incentives that influence those choices
Microeconomics
Study of choices that individuals and businesses make, how those choices interact in markets, and influence of government
Macroeconomics
Study of the performance of the natural and global economics
Self-interest
What you think is best
Social interest
What is best for society
Tradeoff
Choice
Rational choice
A choice made by comparing benefits and costs
Benefit
What you gain from something
Cost
What you give up to get something
Marginal cost
The cost of one more unit
Marginal benefit
What is gained by one more unit
Positive statement
A statement of fact (of what is)
Normative statement
A statement based on a projection (what aught to be)
Economic model
A description of some aspect of the economic world
