Applied Economics

An approach to economics that seeks to understand behavior and the operation of systems without making judgements - correct answer Positive Economics It is the study of how we make decisions in a world where resources are limited sometimes called the science of decision making - correct answer Economics An approach to economics that analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribed courses of action - correct answer Normative Economics Defined as not enough resources to meet demand - correct answer Scarcity The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling - correct answer Inflation It is the resources in production also known as "the free gifts of nature" - correct answer Natural Resources Refers to the things we would like to have - correct answer Wants It is the resources in production also known as "mankinds physical and mental talent" - correct answer Human Resources Refers to the things we need for survival, such as food, clothing and shelter - correct answer Needs Refers to the true cost of choosing one alternative over the other - correct answer Opportunity cost Phase of the business cycle that sustained economic downturn that impacts our economy and that of other countries and reaches lowest economic point - correct answer Trough (depression) Giving up one thing in order to obtain another - correct answer Trade Offs Phase in the business cycle that decline in the economic performance that could lead to depression - correct answer Recession (contraction) The branch of economics that deals with economic theory and the economic decisions of large bodies of government - correct answer Macroeconomics The branch of economics that deals with behavior and decisions of smaller unit like individuals and businesses. - correct answer Microeconomics Phase in the business cycle that reaches highest economic point - correct answer Peak (boom) The point of intersection when buyers and sellers both agree on the quantity and the price of a good - correct answer Equilibrium Point The compilation of data that describes phenomena and facts - correct answer Descriptive Economics A statement or set of related statements 'bout cause and effect, action and reaction - correct answer Economic Theory The highest price set to protecr buyers by setting a price below equilibrium point - correct answer Ceiling Price The lowest price set by the gov't to protect sellers by setting the price below equilibrium point - correct answer Floor Price Refers to the process of using resources to produce new capital - correct answer Investment Is the percentage of the labor force that is unemployed - correct answer Unemployed Rate It allows people to understand that direction the economy is going and plan accordingly - correct answer Business Cycle Refers to the cost maintaining a certain standard of living - correct answer Cost of Living It is a schedule of quantities that people will sell at different prices - correct answer Supply It is a schedule of quantities of a good and services that people will buy at different prices - correct answer Demand A graphical representation of the relationship between price and quantity supplied; seen as upward sloping curve indicating an inverse relationship between price and demand - correct answer Supply curve A graphical representation of the relationship between price and quantity demanded; seen as downward sloping curve indicating an inverse relationship between price and demand - correct answer Demand Curve