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17 Cards in this Set
- Front
- Back
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Elasticity
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a measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants.
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Scarcity
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the limited nature of society’s resources
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Economics
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is the study of how society manages its scarce resources
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Efficiency
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refers to the size of the economic pie, and equity refers to how the pie is divided
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Equity
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means that those benefits are distributed fairly among society’s members
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Opportunity cost
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is whatever must be given up to obtain some item
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Rational people
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people who systematically and purposefully do the best they can to achieve their objectives
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Marginal changes
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small incremental adjustments to a plan of action
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Incentive
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something that induces a person to act
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Market economy
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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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Property rights
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the ability of an individual to own and exercise control over scarce resources
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Market failure
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a situation in which a market left on its own fails to allocate resources efficiently
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Externality
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the impact of one persons actions on the well being of a bystander
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Market power
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the ability of a single economic factor (or small group of factors) to have a substantial influence on market prices
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Productivity
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the quantity of goods and services produced from each hour of a workers time
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Inflation
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an increase in the overall level of prices in the economy
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Business cycle
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fluctuations in economic activity, such as employment and production
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