Intro to Microeconomics

Question 1

Scarcity

Answer 1

limited nature of society’s resources

Question 2

Economics

Answer 2

study of how society manages it’s scarce resources

Question 3

Efficiency

Answer 3

society is getting maximum benefit from scarce resources

Question 4

equality

Answer 4

benefit from scarce resources is being distributed equally

Question 5

marginal change

Answer 5

small adjustment to plan of action

Question 6

incentive

Answer 6

what motivates a person to act

Question 7

market economy

Answer 7

interaction of individual people and businesses control the economy

Question 8

market failure

Answer 8

market left on its own fails to allocate its own resources efficiently

Question 9

externality

Answer 9

cause of market failure, impact of someone’s actions on a bystander

Question 10

market power

Answer 10

cause of market failure, individual or small group has substantial influence on market prices

Question 11

factor market

Answer 11

different factors of production (land, capital, labor are bought and sold)

Question 12

product market

Answer 12

goods and services are bought and sold

Question 13

production possibilities frontier

Answer 13

graph that shows the various combinations of output that the economy can possibly produce given the available factors of production and the available production technology that firms use to turn these factors into an output

Question 14

law of supply

Answer 14

the direct relationship between price and quantity supplied. as quantity increases, price increases