Running head: BUSINESS AND ECONOMICS - Collection of Key Terms 1
BUSINESS AND ECONOMICS
Collection of Key Terms
Based on the book of Economics by Acemoglu, D;
Laibson, D & List, J. A.; second edition.
,BUSINESS AND ECONOMICS - Collection of Key Terms 2
Preliminary Remarks:
This document is a collection of exam relevant key terms for the second period of 2019/2020 based on
the book Economics by Acemoglu, D; Laibson, D & List, J. A.; second edition. Not relevant key terms
are left out.
If you are trying to find a word, just click on a chapter in the table of contents or press command+F to
search for a specific word.
,BUSINESS AND ECONOMICS - Collection of Key Terms 3
Table of Contents:
, BUSINESS AND ECONOMICS - Collection of Key Terms 4
Chapter I – The Principles and Practice of Economics
Term Explanation
Economic agent Individual or group that makes choices
Scarce resource Things that people want, where the quantity
that people want exceeds the quantity that is
available
Scarcity Situation where people have unlimited
wants in a world of limited resources
Economics Study of how agents choose to allocate
scarce resources and how those choices
affect society
Positive economics What people actually do – objective
statements
Normative economics What people ought to do – subjective
judgments
Microeconomics Study of how individuals, households, firms
and governments make choices and how
those choices affect prices, the allocation of
resources and the well-being of other agents
Macroeconomics Study of the economy as a whole (economy-
wide phenomena)
Optimization Picking the best feasible option, given
whatever (limited) information, knowledge,
BUSINESS AND ECONOMICS
Collection of Key Terms
Based on the book of Economics by Acemoglu, D;
Laibson, D & List, J. A.; second edition.
,BUSINESS AND ECONOMICS - Collection of Key Terms 2
Preliminary Remarks:
This document is a collection of exam relevant key terms for the second period of 2019/2020 based on
the book Economics by Acemoglu, D; Laibson, D & List, J. A.; second edition. Not relevant key terms
are left out.
If you are trying to find a word, just click on a chapter in the table of contents or press command+F to
search for a specific word.
,BUSINESS AND ECONOMICS - Collection of Key Terms 3
Table of Contents:
, BUSINESS AND ECONOMICS - Collection of Key Terms 4
Chapter I – The Principles and Practice of Economics
Term Explanation
Economic agent Individual or group that makes choices
Scarce resource Things that people want, where the quantity
that people want exceeds the quantity that is
available
Scarcity Situation where people have unlimited
wants in a world of limited resources
Economics Study of how agents choose to allocate
scarce resources and how those choices
affect society
Positive economics What people actually do – objective
statements
Normative economics What people ought to do – subjective
judgments
Microeconomics Study of how individuals, households, firms
and governments make choices and how
those choices affect prices, the allocation of
resources and the well-being of other agents
Macroeconomics Study of the economy as a whole (economy-
wide phenomena)
Optimization Picking the best feasible option, given
whatever (limited) information, knowledge,
