ECP3302 week one terms

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what is an example of normative economics?

we should restrict the use of fracking technology because of the risk of contaminating groundwater

positive economics

what is

normative economics

what should be

scarcity

when human wants for goods and services exceed the available supply

marginal cost

cost of the last hour of advertising

cost benefit principle

An economic unit will decide to take an action if the marginal benefit is at least as great as the marginal cost

what is an example of positive economics?

The development of fracking technology has resulted in an increase in the supply of oil

Marginal utility per dollar

Units of satisfaction per dollar spent

why do markets tend to be effiecient?

because they are based on voluntary exchange

ecological factors

energy supply, natural capital, and the absorptive capacity of the environment influence

opportunity cost

explicit + implict cost (value of waht you give up and value of next best choice)

marginal utility

extra satisfaction received from consuming one more unit of a good

where is marginal revenue in a competitive market?

in a competitive market marginal revenue =price

sustainabilty

leave future generations no worse off

explicit cost

money changes hands

implicit cost

no payment is made

what is a model?

relationship between variables

total benefit

revenue generated by all customers for all advertising hours

marginal benefit

revenue generated by the additional customers gained from the last hour of advertising

total utility

satisfaction received from consuming a bundle of goods

economics

the study of how economic units make decisions under scarcity and the incentives and objectives that influence those decision

total cost

total amount spent for all hours of advertising

net benefit

total benefit - total cost

rational

using all available information when making decisions

efficiency

using resources in the most productive way possible to produce the goods/ services people want


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