chapter 1 flashcards.txt

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markdoronio
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91406
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chapter 1 flashcards.txt
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2011-06-20 21:53:36
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chapter micro economics economic activity contects
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Micro Economics Chapter 1
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  1. � Economics �
    the study of the way people organize themselves to sustain life and enhance its quality
  2. o The four activities:
    resource maintenance and the production, distribution, and consumption of goods and services
  3. � Positive Questions �
    questions about how things are
  4. � Normative questions �
    questions about how things could be
  5. � Intermediate goal -
    achievement that will bring you closer to final goal(s)
  6. � Final Goal �
    goal that requires no further justification; it is an end in itself
  7. � Wealth �
    whatever confers the ability to produce and procure valued goods and services
  8. � Efficiency �
    use of resources in a way that does not involve any waste
  9. � Well-being �
    a shorthand term for the broad goal of promoting the sustenance and flourishing of life
  10. � Economic actor/agent �
    individual or group involved in the economic activities of resource maintenance or the production, distribution, or consumption of goods and servicesMay also include, for e. xample, legislatures whose decisions affect the kinds of economic activity that are possible, and activist who aim to prevent certain types of economic activity
  11. � Negative externalities �
    Harmful side effects, or unintended consequence, of economic activity
  12. � Positive externalities �
    beneficial side effects, or unintended consequence, of economic activity
  13. � Transition costs �
    the costs of arranging economic activities
  14. � Resource Maintenance �
    the management of natural, manufactured, human, and social resources in such a way that their productivity is sustained
  15. � Production �
    The conversion of resources into goods and services
  16. � Distribution �
    The sharing of products and resources among people
  17. � Exchange �
    the trading of one thing for another
  18. � Transfer �
    the giving of something, with nothing specific expected in return
  19. � Consumption �
    the final use of a good or service
  20. � Abundance �
    Resources are abundant to the extent that they exist in plentiful supply for meeting various goals
  21. � Scarcity �
    Resources are scarce to the extent that they are not sufficient to allow all goals to be accomplished at once
  22. � Production Possibilities Frontier (PPF) �
    Curve showing the maximum amounts of two outputs that society could produce from given resources, over a given time period
  23. � Opportunity cost �
    value of the best alternative that is foregone when a choice is made
  24. � Technological Progress �
    The development of new methods of converting inputs into outputs
  25. � Core Sphere �
    Households, families, and communities
  26. � Public Purpose sphere �
    governments and other local, national, and international organizations established for some public purpose beyond individual or family self-interest and not operating with the goal of making a profit
  27. � Public goods �
    goods for which Use by one person does not diminish usefulness to others, and It would be difficult to exclude anyone from benefitting
  28. � Free Riders �
    people who enjoy the benefit of a public good without paying for it
  29. � Business Sphere �
    firms that produce goods and services for profitable sale
  30. � Informal Sphere �
    businesses operating outside of government oversight and regulation. In less industrialized countries, it may constitute the majority of economic activity
  31. � Microeconomics �
    sub-field of general economics that focuses on activities that take place within and among the major economic organizations of a society
  32. � Macroeconomics �
    sub-field of general economics that focuses on the economy as a whole
  33. � Model �
    an analytical tool that highlights some aspects of reality while ignoring others
  34. � Traditional microeconomic (basic neoclassical) model �
    portrays the economy as a collection of profit-maximizing firms and utility-maximizing households interacting through perfectly competitive markets
  35. �Economistic thinking �
    thinking that confuses the assumption of the traditional model with reality

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