Vocabulary - Chapter 1-Vocab 1. 2. 3. 4. 5. 6. 7. 8. 9. 10....

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Chapter 1-Vocab 1. Scarcity- the limited nature of society’s resources 2. Economics- the study of how 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 in order to obtain some item 6. Rational People- people who systematically and purposefully do the best they can to achieve their objective 7. Marginal Changes- small incremental adjustments to a plan of action 8. Incentive- something that induces a person to act 9. 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 10. Property rights- the ability of an individual to own and exercise control over scarce resources 11. Market failure- a situation in which a market left on its own fails to allocate resources efficiently 12. Externality- the impact of one persons actions on the well being of a bystander 13. Market power- the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices 14. Productivity- the quantity of goods and services produced from each hour of a worker’s time 15. Inflation- an increase in the over level of prices in the economy 16. Business cycle- fluctuations in economic activity, such as employment and production Chapter 2-Vocab 1. Circular-flow Diagram- a visual model of the economy that shows how dollars flow
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Vocabulary - Chapter 1-Vocab 1. 2. 3. 4. 5. 6. 7. 8. 9. 10....

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