economics - ANS -the study of how people allocate scarce resources, the study of how people respond to incentives, a study of human behavior
scarcity - ANS -stuff is limited
choice - ANS -people must choose because
...
economics - ANS -the study of how people allocate scarce resources, the study of how people respond to incentives, a study of human behavior
scarcity - ANS -stuff is limited
choice - ANS -people must choose because the fact that things are scarce
opportunity cost - ANS -the value of the best thing given up
tradeoffs - ANS -we must trade off one thing against another
rational self interest assumption - ANS -false, but useful
models - ANS -frameworks for thinking about an economic phenomenon
ceteris peribus - ANS -other things equal, or other things the same
positive economics - ANS -the world the way it is
normative economics - ANS -the world the way it should be
demand - ANS -relationship between the price of a good or service and the quantity demanded
Law of demand - ANS -as price rises, quantity demanded falls
diminishing marginal utility - ANS -as we consume more of something, additional units do not bring as much satisfaction
consumer surplus - ANS -difference between what a consumer is willing to pay vs. what they actually pay
market demand - ANS -the horizontal sum of individual demand curves
supply - ANS -a relationship between the price a producer receives and the quantity produced
law of supply - ANS -as price rises, quantity supplied rises
producer surplus - ANS -the difference at which a good is sold and the cost of producing that additional unit of the good
market supply - ANS -the horizontal sum of individual supply curves
[Show More]