Chapter 2 - Thinking Like an Economist Flashcards Preview

Economics > Chapter 2 - Thinking Like an Economist > Flashcards

Flashcards in Chapter 2 - Thinking Like an Economist Deck (6)
Loading flashcards...
1

Microeconomics

The study of how households and firms make decisions and how they interact in markets

2

Positive statements

Claims that attempt to describe the world AS IT IS

3

Macroeconomics

The study of economy-wide phenomena, including inflation, unemployment, and economic growth

4

Normative statements

Claims that attempt to prescribe how the world SHOULD BE

5

Circular-flow diagram

A visual model of the economy that shows how dollars flow through markets among households and firms

6

Production possibilities frontier

A graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the availed production technology