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22 Cards in this Set
- Front
- Back
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Invisible hand |
The way a market economy manages to harness the power of self-interest for the good of society |
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Market economy |
Production and consumption is are the result of decentralized decisions by many firms and individuals |
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Economics |
The social science that studies the production, distribution, and consumption of goods and services |
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Command economy |
A central authority makes decisions about production and consumption. |
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Economic growth |
Growing ability of the economy to produce goods and services |
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Opportunity cost |
What you must give up in order to get an item you want |
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Microeconomics |
Study of how individuals make decisions and how these decisions interact |
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Market failure |
When individual pursuit of own interest makes society worse off |
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Economic interactions |
How one person's choice affects others choices |
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Resource |
Anything that can be used to produce something else |
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Capital |
Machinery, buildings, and other man-made productive assets |
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Trade-off |
Comparison of costs and benefits |
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Marginal decision |
Deciding whether to do more or less of something |
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Marginal analysis |
Cost and benefits of doing more of an activity compared to doing less |
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Incentive |
An opportunity to make yourself better off |
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Equilibrium |
When individuals can no longer benefit themselves in a situation by doing something different |
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Efficieny |
Producing at optimal level |
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Comparative advantage |
when opportunity cost of producing a product is lower than a competitor cost of production |
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Absolute advantage |
When business can produce more output per worker than other companies |
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Barter |
One party directly trades one good or service for another good or service |
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Positive economics |
Analysis about the way the world works that have definitive right or wrong answers |
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Normative economics |
How the world should work, what if questions |
