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10 Cards in this Set

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  • Back
Economics
"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.
Scarcity
"The limited nature of society's recources."
If we use scarce resources for one purpose, we cannot use them for another.
Efficiency
"The property of society getting the most it can from it scarce resources."
Equity
"The property of distributing economic prosperity fairly among the members of society."
Opportunity Cost
"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.
Marginal Changes
"Small incremental adjustments to a plan of action."
Marginal = additional
Market Economy
"An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for good and services."
Market Failure
"A situation in which a market left on its own fails to allocate resources efficiently."
Externality
"The impact of one person's actions on the well-being of a bystander."
Market Power
"The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices."