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Microeconomics Final


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Science of Satisfying unlimited wants with limited resources
The condition of being available in some finite quanity, a limited amount
- What is What will be
- Based on obsrevation
- can be tested, supported or refuted
Positive Economics
- What ought to be ; What should be
- Subjective, based on values
- Cannot be tested
Normative Economics
Study of economic behavior and activities at the level of nations & regions
Study of economic behavior and activities at the level of individual consumers, firms, markets, and industries
Set of economic definitions, concepts, and principles put together to make the cause & effect relationship between economic data
Economic theory
Mistaken notion that what is true for the part is true for the whole
Fllacy of Composition
Mistaken notion that an event that happened before another event was the cause of the event
Post Hoc Fallacy
Allowing personal bias to affect one's analysis
Wrong understanding of the context of a term
Incorrect Definition
Failure to hold other things constant
Ceteris Paribus
The single highest valued alternative forgone as a result of making a selection
Opportunity Cost
Relates to consumers behavior& interest
Ceteris Paribus Other things equal, As the price of agood or service increases the quantity demanded decreases (Price upo quantity demanded down)
Law of Demand
A rightward or outwad shift in the denmand curve
Increase in Demand
A leftward or inward shift in the demand curve
Decrease in Demand
A good or service for which demand increased when income increases
Normal good
A good or service for which demand decreases when income increases
Inferior Good

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