Eco exam 1
Card Set Information
Eco exam 1
Study of how individuals + societies choose to use the scarce resources that nature and previous generations have provided
the functioning of
industries and the behavior of individual decision making units- that is, firms + households.
examines eco behavior of aggregates- income, employment, output, and so on-
on a national scale
best alternative that we forgo, or give up, when we make a choice or decision.
compilation of data that describe phenomenom and facts
analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action.
ceteris paribus, or all else equal
device used to analyze the relationship between two variables while the value of other variables are held unchanged
things that are produed and then used in the production of other goods and services
theory of comparative advantage
ricardos theory that specialization and free trade will benifet all tradng parties, even those that may be "absolutely" more efficient producers
producer can produce product at a lower opportunity cost
production possibility frontier (PPF)
A graph that shows all the combonations of goods and services that can be produced if all of societies resources are used efficiently
central government either directly or indirectly sets output targets, incomes, and prices
individual peole and firms pursue their own self-interst without any central direction or regulation
supply--->demand ON THE INSIDE
Payment ON THE OUTSIDE
af price falls, quantity demanded rises