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ABSTRACTION: Simplifying the complexities of the real world by ignoring (hopefully) unimportant details while doing economic analysis. Abstraction is often criticized because it's, well, it's JUST NOT REALISTIC. However, when done correctly (ignoring things that JUST DON'T MATTER), then the pursuit of knowledge is greatly enhanced by abstraction. For example, when travelling cross country along a high-speed interstate highway, a paper road map is a handy tool. It shows towns and cities along the way, the major intersections, rest stop locations, and other important points of interest. However, it ignores unimportant details. It doesn't realistically show the location of every tree, bush, or blade of grass. Why bother? This information won't enhance your road trip.
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Lesson 7: Market Equilibrium | Unit 5: Efficiency
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Page: 17 of 22
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Efficiency is one of the five basic goals of the economy. It's nice to have, if you can.- Efficiency is getting the most satisfaction of wants and needs from available resources.
- Scarcity is less of a problem when resources are used efficiently.
- Economists like markets because they can achieve efficiency under the right conditions. And because markets are self-correcting, they can achieve this efficiency without intervention.
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SAVING SCHEDULE A table or chart that represents the relation between saving by the household sector and income. A saving schedule is commonly used for a basic, instructional presentation of aggregate saving activity by the household sector and is also used as a source of numbers for deriving the saving line. The key measures derived from the saving-income relation in the schedule are average propensity to save and marginal propensity to save. The consumption schedule is comparable, and more important, table for the relation between consumption and income.
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Natural gas has no odor. The smell is added artificially so that leaks can be detected.
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"In a time of drastic change, it is the learners who inherit the future. " -- Eric Hoffer, philosopher
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NIFO
Next In First Out
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