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Flashcards in Chapter 1 Terms Deck (22):
1

The common sense science of how and why people, businesses, and governments make the choices that they do

Economics

2

Having unlimited wants and thus never being satisfied

Insatiability

3

Goods or service being finite or limited in quantity

Scarcity

4

The value people place on a good or service

Economic cost

5

Any tangible (physical) thing that has a measurable life span

Good

6

Items that bear a positive economic cost

Economic goods

7

Services that bear a positive economic cost

Economic services

8

Items that bear a negative economic cost

Nuisance good

9

Turning nuisance goods into economic goods

Recycling

10

Items provided freely by God in nature
(air and water)

Free goods

11

Services provided freely by God in nature
(wind on a windmill, stream on a water wheel)

Free services

12

The riddle that asks which is more valuable, a handful of diamonds or a glass of water, solved by Carl Menger in 1871 when he proposed that value is not inherent in an object but rather is determined by the buyer

Diamond-water paradox

13

Value ascribed to a good or service because of its nature

Intrinsic value

14

the worth of a good or service as determined by its usefulness to the buyer

Subjective value

15

Usefulness

Utility

16

The satisfaction a person receives from a choice

Opportunity benefit

17

The satisfaction one gives up or the regret one experiences for not choosing a desirable alternative

Opportunity cost

18

An imaginary unit of satisfaction

Util

19

The level of economic study that is concerned with choices made by individual units

Microeconomics

20

The level of economic study that is concerned with large-scale economic choices and issues

Macroeconomics

21

The approach to economic study involving the observation of economic choices and the prediction of economic events

Positive economics

22

The approach to economic study involving value judgments about existing and proposed economic policies

Normative economics