Microeconomics Final
Terms
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- Science of Satisfying unlimited wants with limited resources
- Economics
- The condition of being available in some finite quanity, a limited amount
- Scarcity
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- What is What will be
- Based on obsrevation
- can be tested, supported or refuted - Positive Economics
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- 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
- Macroeconomics
- Study of economic behavior and activities at the level of individual consumers, firms, markets, and industries
- Microeconomics
- 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
- Subjectivity
- 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
- Demand
- 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