Economics - Chapter 01

The limited nature of society's resources.

The study of how society manages its scarce resources.

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

The property of distributing economic prosperity fairly among the members of society

whatever you are giving up to obtain some item

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

small incremenal adjustments to a plan of action

Something that induces a person to act; "motivates"

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

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

The impact of one person's actions on the well-being of a bystander

The ability of a single economic actor to have substantial influence on market prices.

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

The quantity of goods and services produced from each hour of a worker's time.

an increase in the overall level of prices in economy.

Fluctuations in economy activities, such as employment and production.

• #1: People face tradeoffs
• #2: The cost of something is what you give up to get ip.
• #3: Rational People Think at the Margin
• #4: People Respond to Incentives
• #5: Trade Can Make Everyone Better Off
• #6: Markets Are Usually a Good Way to Organize Economic Activity
• #7: Government Can Sometimes Improve Market Outcome
• #8: A Country's Standard of Living Depends on Its Ability to Produce Good and Services
• #9: Prices Rise When the Government Prints Too Much Money
• #10: Society Faces a Short-Run Tradeoff Between Inflation and Unemployment