Chapter 1

Question 1

What is economics?

Answer 1

Study of individual decision making

Question 2

Scarcity

Answer 2

Limited nature of society’s resources

Question 3

Efficiency

Answer 3

Property of society getting the most it can from its source resources

Question 4

Equity

Answer 4

The property of distributing econ property fairly among the members of society

Question 5

Opportunity cost

Answer 5

Whatever must be given up to obtain some item

Question 6

Rational people

Answer 6

Those who systematically & purposefully do the best they can to achieve their objectives

Question 7

Marginal changes

Answer 7

Small incremental adjustments to a plan of action

Question 8

Incentive

Answer 8

Sth induces a person to cut

Question 9

Market economy

Answer 9

Allocates resources thru the decentralized decisions of license & households as they interact in mkt for goods & services

Question 10

Market failure

Answer 10

Situation in which a mkt left on its own fails to allocate resources efficiently

Question 11

Property rights

Answer 11

Ability of an individual to own & exercise control over scarce resources

Question 12

Externality

Answer 12

The impact of 1 person’s actions on the well-being of a bystander

Question 13

Market power

Answer 13

The ability of a single icon actor to have a substantial influence on mkt $

Question 14

Productivity

Answer 14

The quantity of goods & services produced from each hour of a worker’s time

Question 15

Inflation

Answer 15

An increase in overall level of prices in econ

Question 16

Business cycle

Answer 16

Fluctuations in econ activity, such as employment & production

Question 17

Circular flow dicegram

Answer 17

Visual model of the con that shows how dollars flow thru mkts among households & firms

Question 18

Production possibilities frontier

Answer 18

Graph shows combinations of output that the econ can possibly produce given the available factors o production nd technology

Question 20

A

Answer 21

A