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Economics (Historical development (Neoclassical economics (Introduced by…

- - - - describing and presenting a theory;
      - facilitating an indirect test of the hypothesis by considering its implications;
      - determining the specific conditions under which the theory can be effective
  - - - Pragmatism considerably combines scientific rationality and economic rationality
      - pragmatic way of thinking belongs to the moral and social sciences
      - Experimental rationality and experimental forms of life
- - - - Analyzes entire economy (meaning aggregated production, consumption, saving, and investment) and issues affecting it
    - - Analyzes individual agents, industries and markets, their interactions, and the outcomes of their interactions
    - - "what is...", "How is.."
    - - "How things should be"
- - - - production is the conversion of inputs into outputs
      - Opportunity cost is the economic cost of production
      - Economic efficiency measures how well a system generates desired output with a given set of inputs and available technology.
    - - Division of labour and trade make everyone better off
    - - The law of demand states that, in general, price and quantity demanded in a given market are inversely related.
      - The higher the price at which the good can be sold, the more of it producers will supply
    - - people begin to organize their production in firms when the costs of doing business becomes lower than doing it on the market
    - - Uncertainty in economics is an unknown prospect of gain or loss, whether quantifiable as risk or not
    - - The downward and upward movement of gross domestic product (GDP) around its long-term growth trend
    - - the percentage of workers without jobs in the labour force
    - - a sustained increase in the general price level of goods and services in an economy over a period of time