Vocab- chap 1, 2, 20 - Chapter 1 Scarcity the limited...

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Chapter 1 Scarcity- the limited nature of society’s resources Economics- the study of how society manages its scarce resources Efficiency- the property of society getting the most it can from its scarce resources Equity- the property of distributing economic prosperity fairly among the members of society Opportunity costs- whatever must be given up to obtain some item Ration people- people who systematically and purposefully do the best they can do to achieve their objectives Marginal Changes- small incremental adjustments to a plan of action Incentive- something that induces a person to act 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 Property rights- the ability of an individual to own and exercise control over scarce resources Market Failure- a situation in which a market left on its own fails to allocate resources efficiently
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