Principles of Economics, Ninth Edition by Karl E. Case, Ray C. Fair, and Sharon M. Oster: Chapter 1: "The Scope and Method of Economics"
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| 50654159 | economics | the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. | |
| 50654160 | opportunity cost | the best alternative that we forgo, or give up, when we make a choice or a decision | |
| 50654161 | scarce | limited | |
| 50654162 | marginalism | the process of analyzing the additional or incremental costs or benefits arising from a choice or decision | |
| 50654163 | sunk cost | costs that cannot be avoided because they have already been incurred | |
| 50654164 | efficient market | a market in which profit opportunities are eliminated almost instantaneously | |
| 50654165 | profit opportunities | "good deals" or risk free ventures | |
| 50654166 | Industrial Revolution | the period in England during the late eighteenth and early nineteenth centuries in which new manufacturing technologies and improved transportation gave rise to the modern factory system and a massive movement of the population from the countryside to the cities. | |
| 50654167 | inflation | an increase in the overall price level in the economy | |
| 50654168 | recession | a period of decreasing output and rising unemployment | |
| 50654169 | GDP | gross domestic product - a measure of the total output of the U.S. economy | |
| 50654170 | microeconomics | the branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units - that is, firms and households | |
| 50654171 | macroeconomics | the branch of economics that examines the economic behavior of aggregates - income, employment, output, and so on - on a national scale | |
| 50654172 | positive economics | an approach to economics that seeks to understand behavior and the operation of systems without making judgments. It describes what exists and how it works | |
| 50654173 | normative economics | an approach to economics that analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action. Also called policy economics | |
| 50654174 | descriptive economics | the compilation of data that describe phenomena and facts | |
| 50654175 | economic theory | a statement or set of related statements about cause and effect, action and reaction | |
| 50654176 | law of demand | as stated by Alfred Marshall in 1890: When the price of a product rises, people tend to buy less of it; when the price of a product falls, people tend to buy more | |
| 50654177 | model | a formal statement of a theory, usually a mathematical statement of a presumed relationship between two or more variables | |
| 50654178 | variable | a measure that can change from time to time or from observation to observation | |
| 50654179 | Ockham's razor | the principle that irrelevant detail should be cut away | |
| 50654180 | ceteris paribus, or all else equal | a device used to analyze the relationship between two variables while the values of the other variables are held unchanged | |
| 50654181 | post hoc, ergo propter hoc | Literally, "after this (in time), therefore because of this." A common error made in thinking about causation: If Event A happens before Event B, it is not necessarily true that A caused B. | |
| 50654182 | fallacy of consumption | the erroneous belief that what is true for a part is necessarily true for the whole | |
| 50654183 | empirical economics | the collection and use of data to test economic theories. In principle, the best model is the one that yields the most accurate predictions. | |
| 50654184 | efficiency | in economics, allocative efficiency. An efficient economy is one that produces that people want at the least possible cost | |
| 50654185 | equity | fairness | |
| 50654186 | Four criteria when judging economic outcomes | efficiency, equity, growth, stability | |
| 67234838 | why study economics | (a) to learn a way of thinking, (b) to understand society, (c) to understand global affairs, (d) to be an informed citizen |
