chapter 2.txt

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chapter 2.txt
2011-06-20 22:01:54
Micro economics chapter

Econ actors and organizations
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  1. � Purposeful (instrumental) behavior �
    actions taken with the expectation that these acts will lead to desired goals
  2. � Extrinsic Motivation �
    Impetus to perform an activity that arises from reasons �outside� the person and the activity, such as doing something to obtain a reward in terms of money, status, or power, or to avoid punishment
  3. � Incentive �
    a reward or punishment that motivates action
  4. � Intrinsic Motivation �
    impetus to perform an activity that arises from reasons �inside� the person, such as doing something for enjoyment or adherence to one�s ethical values or sense of identity
  5. � Self-Interested Motivation �
    motive for action based on the goal of improving one�s own well-being
  6. � Altruistic motivation �
    motive for action that reflect concern only with the well-being of others
  7. � Motivation according to interest in the common good �
    motive for action with the goal of improving social well being, including one�s own well being
  8. � Habitual behavior �
    repetitive behavior that involves minimal thought and is often based on social custom
  9. � Constrained behavior �
    behavior of a person subject to limits set by others, who usually have some power over the person
  10. � Choice behavior �
    behavior selected by a person from a range of alternatives, generally involving the person�s conscious deliberation
  11. � Rational choices �
    thoughtful choices that would normally be expected to move people toward their goals
  12. � Optimize �
    to choose, out of all available options, that option which best achieves what is desired
  13. � Satisfice �
    to choose a level of outcome that would be satisfactory and then seek an option that at least reaches that standard
  14. � Melioration �
    starting from the present level of achievement and continuously attempting to do better
  15. � Bounded Rationality �
    the identification of some arbitrarily defined subset of information to consider when making decisions
  16. � Bounded rationality �
    the identification of some arbitrarily defined subset of information to consider when making decisions
  17. � High time discount rate �
    the economist�s phrase for describing a strong preference for present benefits over those that might be enjoyed in the future
  18. � Low time discount rate �
    describing a strong concern with future benefits, even if getting them is costly in the present
  19. � Economic organizations �
    an entity that is made up of individual economic actors and sub-organizations, which may have common of conflicting interests
  20. � Individual economic actor � a
    n entity that is largely self-contained and acts as a unit. The individual actors and the sub-organizations within an economic organization may share common interests and/or they may have conflicting interests
  21. � Custom �
    body of traditions, habits, and expectations about what it is proper and necessary for people to do given circumstances
  22. � Coordination by consent �
    agreement among a group of people reached through discussion or negotiation
  23. � Coordination by administration �
    a means of organizing an economic unit that gives decision-making authority to some person or agency. The size of an administrative economic organization may be limited by the amount of information it can handle. Improved bureaucratic or technological methods of information handling can increase the size to which such an organization can grow
  24. � Markets �
    social organizations set up to facilitate exchange
  25. � Market failure �
    when markets yield inefficient or inappropriate outcomes
  26. � Circular flow diagram �
    a graphical representation of the traditional view that an economy consists of households and firms engaging in exchange
  27. � Factor markets �
    markets for the services of land, labor, and capital
  28. � Product markets �
    markets for newly produced goods and services
  29. � Perfect rationality �
    the assumption that actors can optimize, arriving at the decision that maximizes profit or utility
  30. �Perfect information �
    the assumption that economic actors know with certainty everything that is important to their decision making