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23 Cards in this Set
- Front
- Back
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Economy
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A system for coordinating society's productive activities
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Economics
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Social science that studies the production, distribution, and consumption of goods and services
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Market Economy
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Production and consumption are the result of decentralized decisions by many firms and individuals
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Invisible Hand
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Way in which individual pursuit of self-interest can lead to good results for society as a whole
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Microeconomics
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Branch of economics that studies how people make decisions and how these decisions interact
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Market Failure
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When the individual pursuit of self-interests leads to bad results for society as a whole
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Recession
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Downturn in the economy
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Macroeconomics
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Branch of economics concerned with overall ups and downs in the economy
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Economic Growth
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Growing ability of the economy to produce goods and services
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Individual Choice
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Decision by an individual of what to do, which necessarily involves a decision of what not to do
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Years of serious US recessions
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1973, 1981, 1990, 2001, 2007
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Resource
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Anything that can used to produce something else
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Scarce
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Not enough of the resource is available to satisfy all the various ways a society wants to use them
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Opportunity Cost
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The real cost of an item is what you must give up in order to get it
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Trade-off
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When you compare the costs with the benefits of doing something
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Marginal Decision
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Decisions comparing the costs and benefits of doing a bit more or a bit less
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Marginal Analysis
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Study of marginal decision-making
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Incentive
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Anything that offers rewards to people who change their behavior
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Interaction
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My choices affect your choices, and vice versa
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Trade
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Provision of goods and services to others and receipt of goods and services in return
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Gains from Trade
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People can get more of what they want through trade than they could if they tried to be self-sufficient
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Equilibrium
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When no individual would be better off doing something different
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Efficient
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When an economy takes all opportunities to make some people better off without making other people worse off
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