Economics Chapter 1 Terms - Basic Principles of Economics
This set consists of important terms in Chapter 1 of Grade 12 Economics (university preparation)
Terms
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- normative statement
- which type of statement is this: Governments should provide affordable daycare for working parents
- production possibilities curve
- the illustration is based on the premise of full employment
- opportunity cost
- the cost of all that is lost from taking one course of action over another; the second best choice you give up in order to get your best choice
- output
- the products produced by using resources or inputs such as land, labour, or capital
- conditional statement
- which kind of statement is this, "If the price of cigarettes decreases, the quantity purchased will increase."
- fallacy of composition
- a mistaken belief that what is good for an individual is automatically good for everyone, or vise versa
- analytical economics
- another word for positive economics; the branch of economics that deals with facts and direct observation of the world
- frontier
- the curve on a production possibilities graph representing the maximum numbers of two items that can be produced with a given amount of resources
- fallacy of composition
- which fallacy is presented: If every Canadian worker received a 10 percent pay increase, the nation as a whole would be better off
- social science
- science, such as economics, history, and sociology, that studies some aspect of human behaviour
- input
- a productive resource such as land, labour, or capital used to produce an output
- human behaviour and value systems
- two things which greatly complicate studies in the social sciences
- origin
- as used in graphs, the point at which the vertical and horizontal axes meet
- law of increasing relative cost
- the increase in the relative cost of producing more of item A, measured by the numbers of another item, B, that could be produced with the same resources
- effective
- a particular use of resources that achieves a desired end, such as consumption
- nemo
- the Greek word for "to manage"
- capital resource
- which type of resource does seed belong to
- policy economics
- another word for normative economics; deals with value judgements
- resources
- all those elements used in the production of goods and services designated to meet our needs and wants
- cause-and-effect fallacy
- a mistaken belief that what occurs before some event is logically the cause of it
- economy
- a self-sustaining system in which many independent transactions (often triggered by self-interest) create distinct flows of money and products
- economy
- it involves a series of independent transactions motivated by economic goals
- positive economics
- another word for analytical economics, concerned with descriptive and conditional statements
- post hoc fallacy or cause-and-effect fallacy
- which fallacy is presented: Ali's marks improved after she broke up with Evan. He was not a good influence
- scarcity
- the fact that only a limited amount of resrouces is available to produce a limited number of goods and services to meet ralatively unlimited human wants
- relative cost
- the opportunity cost involved in a production possibilities curve
- wants
- the desire for goods or services not essential to sustain human life, such as stylish clothing, exotic foods, jewellery, or travel in the tropics
- goods
- the concrete, physical products we manufacture, such as furniture and automobiles
- economics
- the study of the way society makes decisions about the use of scarce resources
- observation
- the first basic component of the scientific method
- normative statement
- which type of statement is this: it requires political decision making focused on the common good or the collectie well-being of a society
- law of increasing returns to scale
- the increase in the rate of extra outputs produced when all inputs used in production are increased and no inputs are held constant
- normative statement
- which type of statement is this: cannot be confirmed or refuted solely by reference to facts
- post hoc fallacy
- another name for cause-and-effect fallacy
- fallacy of single causation
- which fallacy does it contain: stock market crash caused the Great Depression
- fallacy of composition
- which fallacy is presented: Jasna found the work experience she got through her school's co-op to be of great personal benefit, Co-op should be a compulsory requirement for all secondary school students
- economy
- it consists of interdependent people, groups, and institutions, each performing specialized roles
- fallacy of single causation
- which fallacy is presented: An economic crisis in Japan caused the 1998 decline of the Canadian dollar in international money markets
- economize
- to use limited resources efficiently in production; use resources wisely
- production possibilities curve
- this graph is based on the premise of fixed technology and resource
- trade-off
- the increased production of one good can be achieved only by sacrificing a sufficient quantity of the alternative product
- descriptive statement
- which type of statement is this: factual observations that can be verified or confirmed
- economy
- it is dynamic or subject to movements and exchanges
- fallacy of single causation
- which fallacy is presented: Former prime minister Brian Mulroney was responsible for the economic recession of 1990.
- descriptive statement
- a statement which portrays things as they are in the present or have been in the past
- relative cost
- the cost of producing one item, A, expressed in terms of the number of another item, B, which must be given up in order to produce A
- descriptive statement
- which kind of statement is this, "Automobile sales in Canada in this quarter are 7 percent higher than in the last quarter."
- y-axis
- as in graphs, the axis where price is plotted along
- capital resources
- goods used in the production of other goods and services, such as factories, machines, and tools
- x-axis
- as in graphs, the axis where quantity is plotted along
- fallacy of single causation
- a mistaken belief, based on oversimplification, that a particular event has one cause rather than several
- oikonomia
- the Greek word that refers to the science of household or estate management
- fallacy of composition
- which fallacy does free trade represent
- economic goods
- goods that are scarce and have economic values
- capital goods
- goods used in the production of other goods
- data collection
- the second basic component of the scientific method
- production possibilities curve
- a graphical representation of the production choices facing an economy
- conditional statement
- which type of statement is this: If income taxes are reduced, consumer spending will increase
- Francis Bacon
- the English scientist who first outlined the four basic components of the scientific method
- fallacy
- a hypothesis that has been proven false but is still accepted by many people because it appears to make sense
- fallacy of composition
- which fallacy is presented: What is good for General Motors is good for the Canadian economy
- conditional statement
- which type of statement is this: forecasts
- law of diminishing returns
- the eventual decline in the rate of extra outputs produced that occurs when one input used in production of the output is held constant and the others are increased
- conditional statement
- a forecast based on the careful analysis of economic behaviour
- scientific method
- a method of study used to make discoveries in natural science and social sciences
- post hoc fallacy or cause-and-effect fallacy
- which fallacy is presented: Victoria, British Columbia, has one of the highest death rates in the country, therefore, it must be unhealthy to live there
- economy
- a very complex or intricate system
- knowledge of group behaviour and general tendencies
- the two kinds useful information for decision makers
- normative statement
- a statement which expresses what a particular economicst or group of economists thinks should be the case, based on their value judgements; a statement that cannot be confirmed or refuted solely by reference to facts
- natural resources
- all the resources in nature that have value, such as land, minerals, fresh water, and forests
- verification
- the fourth basic component of the scientific method
- inverse relationship
- as in graphs, the relationship which the line illustrates a downward slope of the relationship between two variables
- efficient
- the use of a bare minimum of resources necessary to achieve a desired end, such as consumption
- consumer goods
- products and services that directly satisfy human wants
- oikos
- the Greek word for "household" or "family estate"
- production possibilities curve
- it illustrates the fundamental problem of scarcity
- economy
- it involves numerous transactions that create two circular flows (money moves in one direction while goods and services move in the opposite direction
- services
- the activities we engage in and sell to others, such as medical and retail services
- free goods
- goods that have no scarcity and exist in sufficient quantities to satisfy everyone's wants
- oikos
- the basic unit of classical Greek society; a large family estate or houshold, including land, crops, a house, family members, slaves, animals, and accumulated wealth
- bowed-out or concave
- the shape of a production possibilities curve representing the law of increasing relative cost
- production possibilities curve
- this model is based on the premise of only two products can be produced by this economy
- human resources
- also called labour, the human efforts used in the production of good and services
- fallacy of single causation
- which fallacy is presented: A multi car acident on the Trans-Canada Highway was caused by bad weather
- agriculture
- what the economy of Greece was based on
- normative economics
- another word for policy economics; the branch of economics that deals with value judgements about economic subjects rather than facts and observations
- economics
- the science of scarcity and choice
- explanation
- the third basic component of the scientific method
- needs
- basic human physical requirements necessary to sustain life, such as food, clothing, and shelter
- Xenophon
- a free citizen-soldier of Athens around 430 BCE; the father of economics who wrote the book Oeconomicus