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ECON 1113: EXAM 1
Economics |
Economics is the social science that analyzes the production, distribution, and consumption of goods and services.
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resources |
things that have value and are used to produce other goods
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Wants |
what people would buy if they had unlimited resources
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Macroeconomics |
Macroeconomics (from Greek prefix "macr(o)-" meaning "large" + "economics") is a branch of economics that deals with the performance, structure, behavior and decision-making of the entire economy, be that a national, regional, or the global economy.
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aggregates |
An aggregate is a collection of items that are gathered together to form a total quantity.
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rationality assumption |
We assume that individuals do intentionally make decisions that would leave them worse off
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Models |
simplified representations of the real world used as the basis for predictions and explanations
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Ceteris Paribus |
other things held constant, or other things held equal
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... |
relying on real world data in evaluating the usefulness of a model
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... |
Assumes people cannot examine or think through every possible choice they confront
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... |
Value free approach to inquiry, no value judgement are involved
If A, then B.
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Normative Economics |
analysis involving value judgements about economic policies; relates to whether things are good or bad
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Scarcity |
We do not have enough of everything, including time, to satify our every desire
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Production |
any activity that results in the conversion of resources into products that can be used in consumption
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