Econ Test #1 example #12359

pleasure or satisfaction

Scarcity and Opportunity

A well-tested economic theory that enables prediction of the probable effects.

the process by which economists test hypothesis against facts to develop theories, principles, and models I called

Hypothesis

is illustrated by a point inside the production possibilities curve.

Resources are not generally equally efficient in producing every good.

1.Observe 2.Formulate a hypothesis 3. Test the hypothesis 4. Accept, reject, or modify hypothesis 5. Continue to test hypothesis if necessary

As more of a particular good is produced, its marginal opportunity costs increase. The PPC is concave because of the increasing opportunity costs

Economic statements that are factual (what is)

Economic statements that involve value judgements (what ought to be) Ex: The inflation rate in the U.S was too high