question
economics
answer
studies the decisions that individuals/societies make in the presence of scarcity
question
scarcity
answer
society's wants > available resources to satisfy those wants
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microeconomics
answer
studies the decisions of individuals (consumer, firm, ect.)
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macroeconomics
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deals w/ the behavior of the economy as a whole (economic aggregate)
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aggregate
answer
to sum up, add up, combine
e.g. GDP, un/employment rate
e.g. GDP, un/employment rate
question
tradeoffs
answer
Mankiw's 1st principle
to get 1 thing we want, we must also give up something else we want
--> direct result of scarcity
to get 1 thing we want, we must also give up something else we want
--> direct result of scarcity
question
opportunity cost
answer
Mankiw's 2nd principle
of a decision is the value of what you gave up
--> directly related to tradeoffs
--> indirectly relate to scarcity
of a decision is the value of what you gave up
--> directly related to tradeoffs
--> indirectly relate to scarcity
question
incentives
answer
Mankiw's 3rd principle
people respond *change their behavior) as a result of an incentive
- positive
- negative
people respond *change their behavior) as a result of an incentive
- positive
- negative
question
another application of opportunity cost (& how it changes, decisions change)
answer
in dif contexts, opportunity costs change, which influence your decision
question
markets
answer
Mankiw's 4th principle
are generally a good way of allocating goods & services
*2 markets may be dif, but related
are generally a good way of allocating goods & services
*2 markets may be dif, but related
question
allocating
answer
who ends up buying the good, who ends up selling it
(involves price & quantity)
(involves price & quantity)
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government
answer
Mankiw's 5th principle
sometimes can improve on a market outcome
sometimes can improve on a market outcome
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externalities
answer
Mankiw's 6th principle
people no directly involved in a market (not buying/selling a good) are still affected by it
*not always specific people, it can be an idea/concept/action
people no directly involved in a market (not buying/selling a good) are still affected by it
*not always specific people, it can be an idea/concept/action
question
margin (very specific)
answer
1 way to think about it - an actual border - the edge of something
e.g. the MN/WI border regarding no Sunday alcohol purchasing in MN
e.g. the MN/WI border regarding no Sunday alcohol purchasing in MN
question
Marginal Cost v. Marginal Sales
answer
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