Econ Flashcards
The basic economic problem that arises because people have unlimited wants but resources are limited.
Scarcity
Choosing one option means giving up another.
Trade-offs
The cost of the next best alternative foregone.
Opportunity Cost
The assumption that individuals make choices that maximize their benefits while minimizing costs.
Rationality
Mutual benefits that arise from voluntary exchange.
Gains from Trade
The study of individual markets and economic agents (micro) versus the study of the economy as a whole (macro).
Microeconomics vs. Macroeconomics
A market structure with a single seller and no close substitutes for the product or service offered.
Monopoly
A market structure characterized by a few firms that dominate the market, often leading to competitive behaviors.
Oligopoly
A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power.
Monopolistic Competition
Costs or benefits of economic activities that affect third parties and are not reflected in market prices.
Externalities
Goods that are non-excludable and non-rivalrous, meaning they can be consumed by many people simultaneously without diminishing in value.
Public Goods
The basic economic problem that arises because people have unlimited wants but resources are limited.
Scarcity
Choosing one option means giving up another.
Trade-offs
The cost of the next best alternative foregone.
Opportunity Cost
The assumption that individuals make choices that maximize their benefits while minimizing costs.
Rationality
