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Flashcards in Foundations of Economics Deck (18)
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1

Social science

a study of society and the way individuals interact within it.

2

Economics

a social science, and is the study of how society employs finite resources in order to satisfy infinite wants.

3

Microeconomics

the study of individual economic units such as households and firms.

4

Macroeconomics

the part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity.

5

Positive statements

based on facts or evidence so can be proven or disproved using a scientific approach.

6

Normative statements

based on opinions and value judgements.

7

Ceteris paribus

all other things being equal.

8

Scarcity

the result of resources being limited, whereas wants are unlimited.

9

Factors of production

the resources necessary to create goods and services in an economy.

10

Land

the gift of nature, everything on, under, above or in the land/sea.

11

Labor

the human component of the production of a good.

12

Utility

the satisfaction gained from the consumption of a product.

13

Opportunity cost

the cost of the next best alternative forgone.

14

Free good

something which is not scarce, has no opportunity cost and therefore no price.

15

Economic good

something which is scarce and therefore has an opportunity cost and price.

16

Production Possibility Curve

shows all the possible combinations of two goods/services that can be produced within an economy.

17

Capital

any man made goods that are used to produce other goods or services.

18

Enterprise

the risk, creativity and business idea that combines the other factors of production