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16 Cards in this Set
- Front
- Back
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Scarcity |
The limited nature of society's resources |
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economics |
The study of how society manages its scarce resources |
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efficiency |
the property of: society getting the most it can from it's scarce resources |
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equity |
the property of distributing economic prosperity fairly among the members of society |
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Opportunity cost |
whatever must be given up to obtain some item |
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rational people |
people who systematically do the best they can to achieve their objectives |
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marginal changes |
small incremental adjustments to a plan of action |
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inncentive |
something that induces a person to act |
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Adam Smith |
Economist that came up with the invisible hand theory |
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Market Economy |
an economy that allocates resources though the decentralized decisions of many firms and households as they interact with markets for goods and services. |
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Property rights |
The ability of an individual to own and exercise control over scarce resources |
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Market Falure |
A situation in which a market left on it's own fails to allocate it's resources effiecntly |
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Causes of Market failure |
- Externalities - Market Power |
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externality |
the Impact of one person's action on the well being of a bystander |
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Market Power |
The ability of a single economic actor to have a substantial influence on market prices |
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Productivity |
The Quantity of goods and services produced from each hour of worker's time |
