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PCS Economics
Economics Vocabulary Chapter 1
| Term | Definition |
|---|---|
| economics | the study of how people choose to use their limited resources to satisfy their unlimited wants |
| economy | a system used to manage limited resources for the production, distribution, and consumption of goods and services |
| economic enigma | puzzles or riddles that might be explained through an economic analysis (ex: Why do you have to wear a seat belt in a car but not a bus? or Why is their braille on an ATM machine?) |
| resource | anything used to produce an economic good or a service |
| microeconomics | looks at economic decision making by individuals, households, and businesses |
| macroeconomics | focuses on the workings of an economy as a whole |
| positive economics | type of analysis which descries how things are |
| normative economics | type of analysis which focuses on how things ought to be done |
| scarcity | resources used to fulfill our desires are scarce (not enough resources) |
| no-free-lunch principle | another name for scarcity-forces-trade offs principle |
| cost | what you spend in money, time, effort, or other sacrifices to get something |
| benefit | what you gain from something in terms of money, time, experience, or other improements |
| cost-benefit analysis | tool used to calculate costs and benefits |
| margin | a little more of this or a little less of this |
| marginal cost | what you gain by adding one more unit |
| marginal benefit | what you gain by adding one more unit |
| incentive | something that motivates a person to take a particular course of action |
| market | an arrangement that brings buyers and sellers together to do business with each other |
| invisible hand | used to explain how markets do all the coordination |
| law of unintended consequences | law says actions of people and governments always have effects that are not expected |
| data | factual information |
| variable | quantity that can vary or change |
| axis | two perpendicular lines (horizontal line is the x-axis and vertical line is the y-axis) |
| curve | any line representing data points plotted on a graph |
| graph | a visual representation of the relationship between two sets of data |
| economic model | a simplified representation of reality that allows economists to focus on the effects of one change at a time |
| rational behavior model | the idea that people behave in ways that are based on reason and self-interest |
| ceteris paribus | the assumption, used in economic models, that all factors other than those being considered remain the same; from the Latin expression meaning "other things being equal" |
Created by:
Ms.Sala
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