Chalter 1..? Flashcards
Scarcity definition
The limited nature of society’s resources
Economics
The study of how society manages its scarce resources
Efficiency
The property of society getting the maximum benefits from its scarce resources
Equity
The property of distributing economic prosperity fairly among the members of society
Opportunity cost
Whatever must be given up to obtain some item (sacrifice!)
Rational people
People who systematically and purposefully do the best they can to achieve their objectives (takes action only if marginal mbenefit > marginal cost)
Marginal changes
Small incremental adjustments to a plan of action
Property rights
The ability of an individual to own and exercise control over resources.
Resources
Labour, capital, land
Property rights
The ability of an individual to own and exercise control over scarce resources
Markets economy
An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and service
Property rights
The ability of an individual to own and exercise control over scarce resources
Market failure
When a market left on its own fails to allocate resources efficiently
Externality
The impact of one persons actions on the well-being of a bystander
Productivity
The quantity of goods and services produced from each hour of a workers time
