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15 Cards in this Set
- Front
- Back
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Interaction |
Of choices. My choices affect your choices, and vice versa; a feature of most economic situations. The results of this interaction are often quite different from what the individuals intend |
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Trade |
The practice, in the market economy, in which individuals provide goods and services to others and receive goods and services in return. |
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Gains from trade |
Gains achieved by dividing tasks in trading; in this way people can get more of what they want through trade then they could if they tried to be self-sufficient |
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Specialization |
The situation in which each person specializes in the task he or she is good at performing |
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Equilibrium |
An economic situation in which no individual would be better off doing something different |
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Efficient |
Description of a market or economy that takes all opportunities to make some people better off without making other people worse off |
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Equity |
Fairness, everyone gets his or her fair share. Since people can disagree about what is "fair," Equity is not as well to find a concept as efficiency |
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Individual choice |
The decision by an individual of what to do, which necessarily involves a decision of what not to do. |
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Resource |
Anything, such as land, labor, and capital, that can be used to produce something else; includes natural resources (from the physical environment) and Human Resources (labor, skill, intelligence) |
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Scarce |
In short supply. A resources scarslce when there are not enough of the resources available to satisfy all the various ways a society wants to use it. |
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Opportunity cost |
The real cost of an item, what you must give up in order to get it. |
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Trade off |
A comparison of costs and benefits of doing something |
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Marginal decisions |
A decision made at the margin of an activity; to do a bit more or a bit less of that activity |
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Marginal analysis |
The study of marginal decisions |
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Incentive |
Anything that offers rewards to people who change their behavior |
