Chapter 1 - Ten Principles of Economics Flashcards Preview

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Flashcards in Chapter 1 - Ten Principles of Economics Deck (16)
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1

Opportunity cost

Whatever must be given up to obtain some item

2

Efficiency

The property of society getting the most it can from its scarce resources

3

Business cycle

Fluctuations in economic activity, such as employment and production

4

Property rights

The ability of an individual to own and exercise control over scarce resources

5

Market failure

A situation in which a market left on its own fails to allocate resources efficiently

6

Scarcity

The limited nature of society's resources

7

Economics

The study of how society manages its scarce resources

8

Productivity

The quantity of goods and services produced from each unit of labor input

9

Equality

The property of distributing economics prosperity uniformly among the members of society

10

Market power

The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices

11

Inflation

An increase in the other all level of prices in the economy

12

Externality

The impact of one persons actions on the well-being of a bystander

13

Marginal change

A small incremental adjustment to a plan of action

14

Incentive

Something that induces a person to act

15

Rational people

People who systematically do the best they can to achieve their objectives

16

Market economy

An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services