econ 11 - introduction Flashcards
Economics is a ______________ that deals with the allocation of ______________ to satisfy _____________.
1) social science
2) scarce resources
3) unlimited human wants
Three elements of economics?
1) Economics as a science
2) Economics as a social science
3) Scarcity
Two branches of economics?
microeconomics and macroeconomics
Branches of economics:
- studies behavior of individual economic units
- what is the unit of analysis of the above? give five examples
microeconomics
buyer, seller, a household, a firm, a market
Branches of economics:
- studies the behavior of an entire economic as a whole or in the aggregate
- give four indicators of the above?
- unit of analysis?
- macroeconomics
- GNP, GDP, inflation, employment
- an entire country
This type of economics deals with the description and explanation of economic phenomena.
positive economics
What question does Positive economics answer?
“What is?”
This type of economics involves value judgments.
normative economics
What question does normative economics answer?
“What should be?”
!!!!!!!!!!!! INSERT STATEMENTS HERE AND LET YOU IDENTIFY IF THEY ARE POSITIVE OR NORMATIVE ****
hi :D
What does economics use in conducting analyses?
models
A model:
1) is a _________ _________ of reality
2) may be represented by __________ __________ and/or __________
3) often requires us to impose __________ in the analysis
1) simplified representation
2) mathematical equations ; diagrams
3) assumptions
True or False.
Models are not perfect, and results are not always consistent with what is observed in real life.
True
Give three reasons for using models.
1) Allows us to organize our thoughts
2) Allows us to focus on the essential elements of an economic relationship
3) Allows us to abstract from very complex real-world settings
