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18 Cards in this Set
- Front
- Back
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Scarcity |
Society's resources are limited |
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Economics |
The study of how society manages its scarce resources |
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Ten Principles of Economics |
1. People Face Trade-Offs 2. Opportunity Cost 3. Rational People Think At The Margin 4. People Respond to Incentives 5. Trade Can Make Everyone Better Off 6. Markets Are Usually A Good Way To Organize Economic Activity 7. Governments Can Sometimes Improve Market Conditions 8. A Country's Standard of Living Depends On Its Ability to Produce Goods and Services 9. Prices Rise When the Government Prints Too Much Money 10. |
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Efficiency |
The property of society getting as much as possible from its scarce resources |
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Equality |
Distributing society's prosperity equally among its members |
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Opportunity Cost |
Whatever you give up in order to obtain a good or service |
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Rational People |
People who systematically and purposely do the best they can to achieve their objectives |
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Marginal Change |
A small incremental adjustment to a plan of action |
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Incentive |
Something that induces an individual to act |
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Market Economy |
An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services |
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"The Invisible Hand" |
The idea that an individual's efforts/intentions to better themselves benefits society more so than an individual's efforts/intentions to benefit society Idea from Adam Smith |
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Property Rights |
The ability of an individual to own and exercise control over scarce resources |
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Market Failure |
A situation in which a market left on its own fails to allocate resources efficiently |
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Externality |
The impact of one person's actions on the well-being of a bystander |
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Market Power |
The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices |
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Productivity |
The quantity of goods and services produced from each unit of labor input |
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Inflation |
An increase in the overall level of prices in the economy |
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Business Cycle |
Fluctuations in economic activity, such as employment and production |
