micro final vocabs

micro final vocabs - Chapter 1 Scarcity: the limi ted...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 1 Scarcity: the limited nature of society’s resources. Economics: the study of how society manages its scare 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 Cost: Whatever must be given up to obtain some item. Rational people: People who systematically and purposefully do the best they can do 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 efficiency. Externality: the impact of one person’s actions on the well being of a bystander. Market power: the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices. Productivity: The quantity of goods and services produced from each hour of a worker’s time. Inflation: an increase in the overall level of prices in the economy.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Business cycle: fluctuations in economic activity, such as employment and production. Chapter 2 Circular-flow diagram: a visual model of the economy that shows how dollars flow through markets among households and firms. Production possibilities frontier: a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology. Microeconomics: the study of how households and firms make decisions and how they interact in markets. Macroeconomics: the study of economy wide phenomena, including inflation, unemployment, and economic growth. Positive statements: claims that attempt to describe the world as it is. Normative statements: claims that attempt to prescribe how the world should be. Chapter 3 Absolute advantage: the ability to produce a good using fewer inputs than another producer. Opportunity cost: whatever must be given up to obtain some item. Comparative advantage: the ability to produce a good at a lower opportunity cost than another producer. Imports: goods produced abroad and sold domestically. Exports: goods produced domestically and sold abroad. Chapter 4 Market: a group of buyers and sellers of a particular good or service.
Background image of page 2
Competitive market: a market in which there are many buyers and many sellers so that each has a negligible impact on the market price.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 10/09/2008.

Page1 / 12

micro final vocabs - Chapter 1 Scarcity: the limi ted...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online