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Economics: the branch of knowledge concerned with the production,…

- - - - Normal Good- for which demand rises as consumer income rises.
        
        Price elasticity of demand- Gas prices raise demand doesn't change- Example
        
        Government price controls
        
        Price Ceiling- or limit, on how high a price is charged for a product
        
        Price Floor- to prevent prices from being too low.
- - - - Federal Tax- Money used for Military ect.
        
        State Tax- Colorado- Tax removed for roads, schools ect
        
        FICA Tax- Tax used for medicare or social
        security.
        
        FICO Score- Your credit score, reliance to pay back loans.
        
        Mandatory vs. Voluntary Deductions- Mandatory Social security, child payments ect, voluntary is 401k, things like that
        
        Payday Loans- Small companies that give you a loan where you have to pay them back with a very high interest rate
        
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- - - - Diminishing Marginal Utility: a person increases consumption of a product while keeping consumption of other products
        
        Opportunity Cost- the basic relationship between scarcity and choice.
        
        Incentives: Positive and Negative incentives of a certain option or outcome.
        
        Factors of Production: Land: Free Resources from the earth, Labor: Workers, Capital: Machinery or Factories
        
        Production Possibility Curves: Best possible utility for a company.
        
        Factors of production: Land, Labor, Capital
- - - - Nudge- any factor that significantly alters the behavior of humans.
        
        Humans vs Econs
        
        Econs- rational behavior, logic, we used to using logic … To do so we use our wills, we make a mental effort. We are economic. But does this happen really well? Do we always do it? This is the classical theory of economics.
        .
        
        Humans- are not always logical, they have intuition, react automatically, have emotions to decide and can commit errors, from a rational point of view
        
        Anchoring Heuristic - The more you ask for, the more you tend to get.
        
        Availability Heuristic- people make judgments about the likelihood of an event based on how easily an example, instance, or case comes to mind.
        
        Loss Aversion- refers to people's tendency to prefer avoiding losses to acquiring equivalent gains
        
        Status Quo bias- is an emotional preference for the current situation
        
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- - - - Mortgage Backed Security-is a type of asset-backed security that is secured by a mortgage or collection of mortgages.
        
        Credit Default Swap -a buyer of corporate or sovereign debt in the form of bonds attempts to eliminate possible loss arising from default by the issuer of the bonds
        
        Paradox of Thrift -individuals try to save more during an economic recession
        
        Fiat vs Gold- Fiat currency is legal tender whose value is backed by the government that issued it. The U.S. dollar is fiat money, as are the euro and many other major world currencies. This approach differs from money whose value is underpinned by some physical good such as gold or silver, called commodity money
        
        Fractional Reserve Banking-a banking system in which only a fraction of bank deposits are backed by actual cash on hand and are available for withdrawal.
        
        Federal Reserve- is the central bank of the United States. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system
        
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