Chapter 1 – First Principles Flashcards
1
Q
Resource
A
anything that can be used to produce something else.
2
Q
When are resources scarce
A
if there aren’t enough resources available to satisfy the various ways that society wants to use them.
3
Q
opportunity cost
A
the potential benefits that are lost when an individual chooses a substitute over another
4
Q
trade-off
A
when you compare the costs with the benefits of doing something
5
Q
incentive
A
anything that offers rewards to people to change their behaviour
6
Q
gains from trade
A
people can get more of what they want through trade than they could if they tried to be self-sufficient
7
Q
efficient
A
all opportunities to make some people better off without making other people worse off.
8
Q
Equity
A
everyone gets his or her fair share
