Column \"A\" _13. Marginal Benets _14. Marginal Costs _15. Decisions at the Margin _16. Efficiency _1?. Incentive _18. Exchange (Trade) _19. Ceteris Paribus _20. Theory _21. Abstractio_n * _22. Positive economics _23. Normative economics _24. Microeconomics 25. Macroeconomics -io_n is added. Column \"B\" M. Decision making characterized by weighing the additional (marginal) benets of a change against the additional (marginal) costs of a change with respect to cunent conditions. N. The condition when marginal benets equal marginal costs. 0. Additional costs; the costs connected with consuming one more unit of a good or undertaking one more unit of activity P. The branch of economics that deals with human behavior and choices as they relate to highly aggregate markets. 0. Something that encourages or motivates a person to undertake an action. R. The process (used in building a theory) of focusing on a limited number of variables to explain or predict an event 5. The branch of economics that deals with human behavior and choices as they relate to relatively small units: an individual, a rm, an industry, a single market. T. Additional benets; the benets connected with consuming one more unit of a good or using one more unit of service. U. A Latin term meaning \"all other things constant" or \"nothing else changes." if. An abstract representation of the real world designed with the intent to better understand it. W. The study of "what is" in economics. X. The giving up of one thing in return for something else. Y. The study of \"what should be\" in economics. p. q. T. t. V. W. X. y. UOlUt'I'lt'l "L." The method used to describe the reality or the fact as it is. It tries to answer the specic 8: direct economic question: \" what is"? Example: \"the Federal minimum wage is set at $125th , instead of saying 'it should be equal to the living wage\" (ie, about $10.25thr) that involves subjective or value judgment (which is a normative statement). Voluntary act of exchange between two or more parties to better themselves. The technique used to extract theory from a hypothesis or a set of related events. A set of ideas or principles that are tested and accepted. as opposed to a hypothesis. For example: The earth is 'round' in shape as opposed to saying it is "at". There might be a planet like earth that supports life (which is a hypothesis). Extra units of satisfaction as a result of consuming extra unit[s) of a product. The division of economics that deals with the study of the \"Bigger" issues that affect the entire economy. Examples include : Economic Growth, Unemployment , Money Supply, Interest rate, Fiscal Polices (by the Federal and State governments] and Monetary Policies (by the Federal Reserve Bank). E.g. It is like studying about the "forest" as opposed to the individual trees that make up the forest. The extra cost or burden or effort or hustle that is involved in consuming or using one more unit of a good or service crtaking part in one more unit of activity. The division of economics that deals with the study of \"Smaller" units (firms 8. households) that make up the economy or deals with issues that affect our day-to-day lives as consumers or business owners. It is like studying about the specic features of an individual 'tree\" that make up the forest as opposed to the forest that contains the trees. The state of the mind formed by comparing the extra cost & benefit associated with a good or bad choice before making a decision to take part in an activity. Example: the decision to agree to work for additional hours or to accept a second part time job. The method that Involves subjective value judgment and it tries to answer the question \"what ought to be?\" Example: \"All households should live within their own means without being in debt", as opposed to saying. \"the average US. household credit card debt is about $1 5,000 in 2015' (a description of the fact using a positive statement). Doing the best with what we have. Achieving the best possible outcome among the different alternatives we have. Example: Farmers in developing counties are poor but know what to do with their limited resources, implying that you can be poor and efcient. Reason(s) that motivate people to do what they do best. Example: Allocation of extra credit points for taking a survey in an economics class. A compound Latin word used to simplify economic analysis between two or more variables by suppressing changes in the other less important variables to the issue. 4
