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Related Flashcards
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Cards In This Set
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Natural Resources
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The lands, water, metals, minerals, andimals and other gifts of nature that are available for producing goods and services
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Scarcity
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The perpetual state of insufficiency of resources to satisfy people's unlimited wants
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Economics
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Study of how people work together to transform resources into g and s to satisfy their most pressing wants, and how they distribute these g and s
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Consumer Sovereignty
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The ability of consumers to exercise complete control over what goods and services the economy produces or not by choosing what to buy
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Economic Model
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An abstraction of an economic reality; it can be expressed pictorially, graphically, algebraically or in words
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Ceteris Paribus
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Latin phrase meaning "everything else being equal"
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Circular Flow Model
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Model of how economy's resources, $, g and s flow between households and firms through resource and product markets
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Household
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Economic unit of one or more ppl living under one roof that has a source of income and uses it in whatever way it deems fit
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Firm
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Economic unit that produces g and s in teh expectation of selling them to households, other firms, or gvmnt
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Microeconomics
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Subarea of econ that analyzes individ as cons and produc & specific firms & industries; focuses especially on market behavior of firms & households
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Macroeconomics
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Subarea of econ that analyzes the behavior of economy as a whole
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Positive Economics
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Subset of econ that analyzes the way the economy actually operates
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Normative Economics
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Subset of economics founded on value judgments & leading to assertions of what ought to be
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Invisible Hand
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Adam Smith's concept of market as if it were a hand, guides firms that seek only to satisfy own self-interest to prod those g & s that cons want
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Econometrics
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Use of statistics to quantify and test economic models
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