Ten principles of Economics Flashcards
Economics
The study of how society manages its scarce resources
Scarcity
The limited nature of societies resources.
Efficiency
Getting the maximum benefits of scare resources
Equality
The property of distributing economic prosperity uniformly among the members of society
Opportunity cost
Something that is given up in order to receive something
Rational people
People who do the best they can to achieve their objectives
Marginal change
A small incremental adjustment to a plan of action
Incentive
Something that induces someone to act
Market Economy
Decisions of the central planner, as in communism, is then replaced by the by decisions of millions of households and firms.
Property rights
The ability of an individual to own and exercise control over scarce resources
Market failure
A situation left where the market is left on its own, fails to efficiently allocate resources.
Market power
The ability of a single individual or group to have a major influence on the market.
Productivity
The quantity of goods & services produced from each unit of labor input
Inflation
An increase in the overall level of princes in the economy
Business cycle
Fluctuations in economic activity like production or employments
