There is less of a good freely available from nature than people would like.
The act of selecting among alternatives
An input used to produce economic goods. (land, labor, skills, natural resources, and capital)
Human-made resources used to produce other goods and services. (tools, equipment, and structures)
A fact based on an observable phenomena that is not influenced by differences in personal opinion
Am opinion based on personal preferences and value judgments
Allocating a limited supply of a good or resource among people who would like to have more of it.
A set of definitions, postulates, and principles assembled in a manner that makes clear the cause and effect relationships
The highest value alternative that must be defrauded as a result of choosing an option
Choosing the option that offers the greatest the greatest benfit at the least possible cost.
The subjective benefit or satisfation a person expects from a choice or course of action
Term used to describe the effects of a change in the durrent situation. Ex: a producer's marginal cost is the cost of producing an additional unit of a product, given the producer's current facility and production rate
The indirect impact of an event or policy that may not be easily and immediately observable. In the are of policy, these efects are often both unintended and overlooked
Developing a theory from basic principles and testing it against event in the real world. Good theories are consistent with and help explain real-worl events. theories that are inconsistent with the real world are invalid and must be rejected
The scientific study of "what is" among economic relationships.
Judgements about "what ought to be" in economic matters. Normative economic views cannot be proven false because they are based on value judgements.
latin meaning "other things constant".
Fallacy of composition
what is true for the individual will also be true for the group.
economics that focuses on how human behavior effects the conduct of affairs within narrowly defined units, such as individual households or business firms.
economics that focuses on how human behavior effects outcomes in highly aggregated markets, such as the markets for labor or consumer products.