Micro chapter 1

Question 1

Incentive

Answer 1

A reward or punishment

Question 2

Rational People

Answer 2

Individuals who make the best choices based on goals

Question 3

Market economy

Answer 3

Resources priced by demand

Question 4

Property Rights

Answer 4

The right to own any good

Question 5

Externality

Answer 5

How one persons actions affects others

Question 6

What is an example of externality?

Answer 6

Company dumping waste in the river

-therefore it affects drinking water and kids cannot swim in a river

Question 7

Who decides the price of a good in a market economy?

Answer 7

Consumer

Question 8

Market Failure

Answer 8

Market that fails to distribute resources efficiently

Question 9

Equality

Answer 9

Resources that are distributed equally

Question 10

Scarcity

Answer 10

Economy has limited resources

Question 11

How is scarcity applied?

Answer 11

When people cannot have all the goods they want

Question 12

What is an example of a business cycle?

Answer 12

A recession due to less jobs being available

Question 13

Efficiency

Answer 13

Resources that are used to its fullest potential

Question 14

What is an example of productivity

Answer 14

Most productive I take 5 shots of vodka in 20 minutes

If I take 4 shots I am not reaching my fullest potential

Question 15

Trade off

Answer 15

giving up one thing for the other

Question 16

Business Cycle

Answer 16

The movement in economic activity

Question 17

What is an example of market failure?

Answer 17

When the government prices items instead of the consumer (cigarettes)

Question 18

Market Power

Answer 18

When a firm or person influences market prices

Question 19

Inflation

Answer 19

When prices increase in an economy

Question 20

Productivity

Answer 20

What you produce given the amount of work

Question 21

Opportunity cost

Answer 21

Cost of what you give up

Question 22

What is an example of market power?

Answer 22

Monopoly

Question 23

Economics

Answer 23

Study of how an economy manages scarcity

Question 24

Name 3 items that have property rights

Answer 24

My IPAD
Land I own
An idea that I own