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8 Cards in this Set
- Front
- Back
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Individual choice |
Decision by an individual of what to do and what not to do |
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4 factors of production |
Land, labour , capital , entrepreneurship |
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4 principles behind individual choice |
Resources are scarce Real cost of something is what you must give up to get it How much is a decision at the margin Ppl usually take advantage of opps to make themselves better off |
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Marginal analysis |
Compare costs of doing a bit more / less of an activity |
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Incentive |
Anything that offers reward for changing behaviour |
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5 principles of interaction of individual choices |
There are gains from trade Markets move toward equilibrium Resources should be used efficiently to achieve societies goals Markets usually lead to efficiency When markets don’t achieve efficiency, govt intervention can improve societies welfare |
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Equity = |
Fairness |
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3 principles of economy wife interactions |
One persons spending is another’s income Overall spending can get out of line with the economy’s productive capacity Govt policies can change overall spending |
