Chapter 1

  1. scarcity
    the limited nature of a society's resources
  2. economics
    the study of how a society manages its scarce resources
  3. efficiency
    the property of society getting the most it can from its scarce resources
  4. equity
    the property of distributing economic prosperity fairly among the members of society
  5. opportunity cost
    whatever must be given up to obgain some item
  6. marginal changes
    small incrementL adjustments to a plan of action
  7. 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
  8. market failure
    • -a situation in which a market left on its own fails to allocate resources efficiently
    • -externality, market power
  9. externality
    the impact of one person's actions on the well-being of a bystander
  10. market power
    the ability of a single economic actor or a small group of actors to have a substantial influence on market prices
  11. productivity
    the quantity of goods and services produced from each hour of a worker's time
  12. inflation
    an increase in the ocerall level of prices in the economy
  13. Phillips curve
    a curve that shows the short-run tradeoff between inflation and unemployment
  14. business cycle
    fluctuations in economic activity, such as employment and production
Card Set
Chapter 1
A.P. Economics textbook, Chapter 1 vocabulary