Macro Chapter 1

Front 1

Scarcity

Back 1

The limited nature of society's resources

Front 2

The Four Factors of Production

Back 2

Land
Labor
Capital
Entrepreneurship

Front 3

Opportunity Cost

Back 3

Whatever must be given up to obtain some item.
Explicit Cost + Implicit Cost
(out-of-pocket + value)

Front 4

Marginal Benefit

Back 4

is the additional benefit one gains over and above the benefits the agent has already derived.

Front 5

Marginal Cost

Back 5

is the additional cost one incurs over and above the costs an agent has already incurred.

Front 6

Efficiency

Back 6

Is the property of society getting the most it can from its scarce resources.

Front 7

Equity

Back 7

is defined as the property of distributing economic prosperity fairly among the members of society.

Front 8

The efficiency-equity tradeoff

Back 8

When the government tries to cut the economic pie into more equal slices (promote equity), the pie gets smaller (loss of efficiency).

Front 9

Market Economy

Back 9

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

Front 10

Market Failure

Back 10

A situation in which a market left on it's own fails to allocate reources efficiently.

Front 11

Monopoly

Back 11

exclusive control oor possession of something

Front 12

Externality

Back 12

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

Front 13

Market Power

Back 13

The ability of a single economic actor (or small group of actors) to have substancial influences on market prices.

Front 14

Inflation

Back 14

An increase in the overall level of prices in the economy.