Econ Vocabulary chapter 1

the goods available are too few to satisfy individuals desires

a method of reasonging in which one develops general principles by looking for patterns in the data

the additional cost to you over and above the cost you have already incurred

costs that have already been incurred and cannot be recovered

the additional benefit above what you've already derived

• if the marginal benefits of doing something exceeds the marginal cost do it
• if the marginal cost of doing something exceed the marginal benefits dont do it

the benefit that you might have gained from choosing the next-best alternative

the necessary reactions to scarcity

an economic force that is given relatively free rein by society to work through the market

the price mechanism, the rise and fall of prices that guide our actions in a market

a method of analysis that uses a combination of inductive methods and deductive methods

a framework that places the generalized insights of the theory in a more specific contextual setting

a commonly held economic insight stated as a law or general assumption

a branch of economics that studies the economy through controlled laboratory experiments

naturally occuring events that approximate a controlled experiment where something has changed in one place but has not changed somewhere else

achieving a goal as cheaply as possible

a market economy through the price mechanism, will tend to allocate resources efficiently

the study of individual choice, and how that choice is influenced by economic forces

the study of the economy as a whole

actions or inactions taken by government to influence economic actions

the study of what is, and how the economy works

the study of what the goals of the economy should be

also called political economy the application of the knowleadge learned in positive economics to the achievement of the goals one has determiend in normative economics