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16 Cards in this Set

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  • Back
Scarcity
society has a limited amount of resources
Economics
the study of how society manages its scarce resources
Efficiency
the property of society getting the most benefit from its resources

the size of the pie
Equity
the distribution of those benefits to all society

the slices of the pie
(the more equal the slices are, the smaller the pie gets)
Opportunity Cost
whatever must be given up to obtain another item
Rational People
people who do their best to attain their objectives
Marginal Changes
small incremental changes to a plan
Incentive
something that induces a person to act (possibility of punishment or reward)
Market Economy
In such an economy, the decisions made by a central planner are replaced by the decisions of the households
Property Rights
the ability of individuals to own and exercise control over scarce resources
Market Failure
a situation in which a market that is left alone fails to allocate its resources efficiently
Externality
the impact of one person's action on a bystander
Market Power
the ability of a person (or a small group) to unduly influence market prices
Productivity
the quantity of goods/services an individual produces in one hour
Inflation
the overall increase of the level of prices in the economy
Business Cycle
fluctuations in economic activity, as measured by the production of goods/services or the number of people employed