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Flashcards in Final Test Deck (26):
0

Specialization

Focus on the production of one good

2

Absolute Advantage

Ability to be more productive than other people in several or all activities

3

6th Principle of Human Action

All human beings are different, everyone is unique

6

Exchange

Creates richness
Takes advantage on division of knowledge
Benefit arises from the comparative advantage or division of labor

7

5th Principle of Human Action

When we work, we sacrifice our time

9

3rd Principle of Human Action

We live among a world where everything is scarce

10

4th Principle of Human Action

A human being doesn't know it all, makes mistakes, and lives in a a world that isn't perfect

11

Social Cooperation

The relationship each member in s society has with all the other individuals

12

Comparative Advantage

Ability to produce a good with a lower opportunity cost compared to other people

16

1st Principle of Human Action

A human being always acts to diminish his own in satisfactions

18

Productivity

The relationship between production, time, space, resources, and investment

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2nd Principle of Human Action

A human being is capable of choosing all the time

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Scarcity

Inability to satisfy the wants and needs a human being has

22

Economics

Social science that studies the choices we make coping with scarcity and the incentives that affect our choices

23

Goods and Services

Ojects and actions that people value and produce to satisfy human wants

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Self-interest

Choices that are best for an individual

25

Social Interest

Choices that are best for society

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Opportunity Cost

The best thing you must give up to get something else

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Sunk Cost

Previously incurred and irreversible cost

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Benefit

The gain or pleasure something brings

29

Margin

Choice that compares all the relevant factors systematically and incrementally

30

Incentive

Reward or penalty that encourages or discourages an action

31

Marginal Cost

What you must give up to get one additional unit of something

32

Marginal Benefit

What you're willing to give up for getting one additional unit of something

33

Ceteris Paribus

Other things remaining the same

34

Correlation

Tendency for the values of two variables to move in a predictable and related way