Economics - Chapter 01

  1. Scarcity
    The limited nature of society's resources.
  2. Economics
    The study of how society manages its scarce resources.
  3. Effeciency
    The property of society getting the most it can from its scare resources.
  4. Equity
    The property of distributing economic prosperity fairly among the members of society
  5. Opportunity Cost
    whatever you are giving up to obtain some item
  6. Rational People
    People who are systematically and purposefully do the best they can to achieve their objectives
  7. Marginal Changes
    small incremenal adjustments to a plan of action
  8. Incentive
    Something that induces a person to act; "motivates"
  9. Market Economy
    An economy that allocates resources through the decentralized decisions of many firms and households as the interact in the market for goods and services.
  10. Market Failure
    A situation in which a market left on its fails to allocate resources efficiently.
  11. Externality
    The impact of one person's actions on the well-being of a bystander
  12. Market Power
    The ability of a single economic actor to have substantial influence on market prices.
  13. Property Rights
    The ability of an individual to own and exercise control over scarce resources.
  14. Productivity
    The quantity of goods and services produced from each hour of a worker's time.
  15. Inflation
    an increase in the overall level of prices in economy.
  16. Business Cycle
    Fluctuations in economy activities, such as employment and production.
  17. What are the 10 PRINCIPLES OF ECONOMY?
    • #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
Card Set
Economics - Chapter 01
Kwantlen Polytechnic University