ECON 211 Exam 1 (UNL) Complete Guide
Fundamental Economic Concepts
1. Study of Economists: - ️ Economists study all human behavior.
2. Economic Agent: - ️ An economic agent is an individual or a group that makes choices (examples include consumers
choosing between a bacon cheeseburger o...
ECON 211 Exam 1 (UNL) Complete Guide
Fundamental Economic Concepts
1. Study of Economists:
- ✔️ Economists study all human behavior.
2. Economic Agent:
- ✔️ An economic agent is an individual or a group that makes choices (examples include consumers
choosing between a bacon cheeseburger or tofu burger, and a parent deciding between public or
private school for their child).
3. Scarce Resources:
- ✔️ Scarce resources are things that people want, where the quantity that people want exceeds the
quantity that is available.
4. Scarcity:
- ✔️ Scarcity exists because people have unlimited wants in a world of limited resources.
5. Definition of Economics:
- ✔️ Economics is the study of how agents choose to allocate scarce resources and how those choices
affect society.
6. Positive Economics:
- ✔️ Positive economics describes what people actually do.
7. Normative Economics:
- ✔️ Normative economics recommends what people ought to do.
8. Microeconomics:
, - ✔️ Microeconomics is the study of how individuals, households, firms, and governments make
choices and how those choices affect prices, the allocation of resources, and the well-being of other
agents.
9. Macroeconomics:
- ✔️ Macroeconomics is the study of the economy as a whole.
10. Optimization:
- ✔️ Optimization is the process by which people decide what to do by consciously or unconsciously
weighing all known pros and cons of the different available options to pick the best feasible option.
11. Equilibrium:
- ✔️ Equilibrium is a situation in which no agent would benefit personally by changing their behavior.
12. Empiricism:
- ✔️ Empiricism is analysis that uses data or is evidence-based.
13. Trade-Offs:
- ✔️ Trade-offs arise when some benefits must be given up in order to gain others.
14. Budget Constraints:
- ✔️ Budget constraints are the set of things that a person can choose to do (or buy) without
exceeding their budget.
15. Opportunity Costs:
- ✔️ Opportunity costs are the best alternative activity given up when a choice is made.
16. Cost-Benefit Analysis:
- ✔️ Cost-benefit analysis is a calculation that adds up costs and benefits using a common unit of
measurement, like dollars.
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