Chapter 1-10 Prin Of Econ Flashcards
Economics
The study of how society manages its scarce resources
Efficiency
The property of society getting the most it can from its scarce resources
Equality
The property of distributing economics prosperity uniformly among the members of society
Opportunity cost
Whateve must be given up to obtain some item
Rational people
People who systematically and purposefully do the best they can to achieve their objectives
Marginal change
The small incremental adjustment to a plan of action
Incentive
Something that induces a person to act
Market economy
An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for foods and services
Property right
The ability of an individual to own and exercise control over scarce resources
Market failure
A situation in which a market left on its own fails to allocate resources efficiently
Externalities
The impact of one persons actions on the wellbeing of a bystander
Market power
The ability of a single economic actor to have a substantial influence on market prices
Productivity
The quantity of goods and services produced from each unit of labor input
Business cycle
Fluctuations in economic activity, such as employment and production
Scarcity
The limited nature of society’s resources
