Ch2 Economic methodology

Front

What is microeconomics?

Back

The study of how consumers and businesses behave and interact in individual markets.

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What is macroeconomics?

Back

The study of an economy or group of economies.

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Why do economists use models?

Back

To provide a simplified view of reality and test a particular theory.

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What is a positive statement?

Back

A statement based on fact or actual evidence.

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What is a normative statement?

Back

A statement based on opinion or value judgement that cannot be proven.

Front

What does ceteris paribus mean?

Back

Other things remain equal; used to simplify change in complex situations.

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What is the short run in economics?

Back

A time period when a firm can change at least one but not all factor inputs.

Front

What is the long run in economics?

Back

A time period when all factor inputs can be changed with constant technology.

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What is the very long period in economics?

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A time when all inputs into the production process are variable.

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What are some microeconomics questions?

Back

Why do some women earn less than men? Why do we ignore information that could help us make better decisions?