HOMEWORK 1

NEW VOCABULARY	DEFINITION	COMPARISON		RELATIONSHIP		WHAT PICTURE FITS THE NEW  VOCABULARY
	WHAT IS IT?	WHAT IS IT LIKE?	WHAT IS IT NOT LIKE?	WHAT CAUSES IT?	WHAT DOES IT CAUSE?
1.        Microeconomics	Typically, it applies to markets where goods or services are bought and sold. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and quantity demanded of goods and services	Microeconomics is like explaining how consumers react to changes in product prices and how firms decide what prices to charge for the products they sell. [it is also like policy issues that analyzes the most efficient way to reduce teenage smoking, analyzing the costs and benefits of approving the sale of a new prescription drug, and analyzing the most efficient way to reduce air pollution	Microeconomics is not like macroeconomics, which is the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.	Microeconomics is caused by your economic behavior and the economic behavior of others who make choices about such matters as how much to study and how much to party, how much to borrow and how much to save, what to buy and what to sell.	Microeconomics causes the explanation of how price and quantity are determined in individual market-the market for breakfast cereal, sports equipment, or used cars, for instance
2.        Macroeconomics	Macroeconomics (from the Greek prefix makro- meaning "large" and economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. This includes national, regional, and global economies.[1][2] With microeconomics, macroeconomics is one of the two most general fields in economics.	It is like aggregate output, which is labeled as gross domestic product (GDP	It is not like microeconomics, although the division between microeconomics and macroeconomics is not hard and fast	Macroeconomics is caused by fitting the pieces that consist of microeconomics together to form the big picture, such as aggregates, or totals-such as total output in an economy	Macroeconomics causes economists to seek to obtain an overview, or general outline, of the structure of the economy and the relationships of its major aggregates
3.        Scarcity	Scarcity is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs	Scarcity is like when a resource is not freely available-that is, when its price exceeds zero	Scarcity is not like a shortage.	Scarcity is caused by human wants always exceeding what can be produced with the limited resource and time that nature makes available	Scarcity causes no free lunch. The resource that produced the free lunch could have used to produce something else
4.        Opportunity cost	The opportunity cost of a choice is the value of the best alternative forgone, in a situation in which a choice needs to be made between several mutually exclusive alternatives given limited resources. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would be had by taking the second best choice available	Opportunity cost is like when your costs changes because of your choice	Opportunity cost is not like trade-offs	Opportunity cost is caused by the choices we make as a result of scarcity.	Opportunity cost causes the bases of comparative advantage, which states that the individual, firm or country with the lower opportunity cost of producing a particular output should specialize in that output
5.        Production Possibilities	In economics, a production–possibility frontier (PPF), sometimes called a production–possibility curve, production-possibility boundary or product transformation curve, is a graph representing production tradeoffs given fixed resources, a fundamental concept in economics. The graph shows the various combinations of amounts of two commodities that could be produced (e.g., number of guns vs kilos of butter) using a fixed total amount of each of the factors of production.	The PPF is like knowing your options. It is like knowing what will happen or what you will lose if an alternative action is taken	The PPF is not like an economic system that determines how society goes about choosing a particular combination	PPF is either caused by constant or increasing marginal opportunity cost	The PPF causes economists to explore issues concerning the economy as a whole. For example the PPF shows if a country’s resource are devoted to producing one good or a mix of goods.
6.        Ceteris Paribus	Ceteris paribus or caeteris paribus is a Latin phrase meaning "with other things the same" or "all other things being equal or held constant." A prediction or a statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus via acknowledgement that the prediction, although usually accurate in expected conditions, can fail or the relation can be abolished by intervening factors	It is like when all other factors that could affect the outcome (such as the existence of a substitute product) remain constant, prices will increase in this situation	It is not like when all factors are not equal	It is caused by all factors that could affect the outcome.	It causes  a prediction or a statement about a causal, empirical, or logical relation between two states of affairs
7.        Absolute Advantage	In economics, the principle of absolute advantage refers to the ability of a party (an individual, or firm, or country) to produce more of a good or service than competitors, using the same amount of resources	It is like producing more per hour than another	Absolute advantage is not like comparative advantage, because “absolute advantage focuses on who uses the fewest resources, but comparative advantage focuses on what else those resource could produce-that is, on the opportunity cost of those resources	Producing more than your competitor	It causes lesser output and leisure