Unit 1 Flashcards Preview

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Flashcards in Unit 1 Deck (21):
1

opportunity cost

to obtain something, forego next best thing

2

marginal analysis

do benefits outweigh costs?

3

principles of economics

generalizations, assumptions, graphs

4

ceteris paribus

"all other things equal", isolate variables

5

utility

satisfaction

6

purposeful behavior

actions with rationality + self-interest

7

positive v normative

+ what is, norm what should be

8

pitfalls

bias, loaded terminology, Post hoc fallacy, fallacy of composition, correlation not causation

9

post hoc fallacy

false assumption that A preceding B means A caused B

10

fallacy of composition

single variable might not apply to generalization

11

wants

unlimited way of expressing desire for G&S

12

factors of production

labor land, captial, entreprenerial ability

13

ppt model

full employment, fixed resources, fixed technology, 2 goods produced

14

Laissez-faire

gov creates outline, doesn't interact

15

command system

lack coordination, incentives; gov owns f.o.p

16

market system

private property, freedom of enterprise/choice, self-interest, competition

17

specialization

focus on one thing

18

division of labor

use difference of ability for efficiency

19

adam smith

first modern economist, invisible hand

20

invisible hand

guides economy, advancement of society

21

5 fundamental questions

1. what goods/services produced?
2.how will they be produced?
3.who will get output?
4.how will system accommodate change?
5. how will system promote progress?