Unit 1 Study Guide


What is the scientific method? (uses real data and expeirments)

The world is our lab....we study all human behavior

What are positive statements?

What are normative statements?

What is ceteris paribus?

Why do people use models of the world?

What is an exogenous factor?

What is the Production possibilities frontier?

At full employment a society is producing on it's PPF

What is economics? The study of how people make decisions.

What is scarcity?

What are incentives?

What is macroeconomics?

what is microeocnomics?

What is productive efficiency?

What is allocative efficiency?

What is a resource?

What is garbage?

Who faces scarcity?

What is opportunity cost?

What is willingness to pay?

Why does the law of demand exist? (substitution)

How do prices send signals?

What do prices signal to sellers?

What do prices signal to buyers?

How do prices allocate resources?

What is the law of supply?

What are the determinants of demand?

What are the determinants of supply?f