Ap Economics

Front 1

Economics

Back 1

"The study of how society manages its scarce resources."
We have unlimited wants but limited resources therefore we must make choices. Economics is about how individuals and societies make choices about scarce resources.

Front 2

Scarcity

Back 2

"The limited nature of society's recources."
If we use scarce resources for one purpose, we cannot use them for another.

Front 3

Efficiency

Back 3

"The property of society getting the most it can from it scarce resources."

Front 4

Equity

Back 4

"The property of distributing economic prosperity fairly among the members of society."

Front 5

Opportunity Cost

Back 5

"Whatever is given up to obtain some item."
The forgone benefit of the next best alternative when resources are used for one purpose rather than another.

Front 6

Marginal Changes

Back 6

"Small incremental adjustments to a plan of action."
Marginal = additional

Front 7

Market Economy

Back 7

"An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for good and services."

Front 8

Market Failure

Back 8

"A situation in which a market left on its own fails to allocate resources efficiently."

Front 9

Externality

Back 9

"The impact of one person's actions on the well-being of a bystander."

Front 10

Market Power

Back 10

"The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices."