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micro study guide - its scarce resources getting the...

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Microeconomics Final Exam Chapter one: scarcity – the limited nature of society’s resources meaning they cannot produce all the goods and services people wish to have first principle to economics is that people make tradeoffs meaning “to get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading off one goal against another.” A trade off society faces is between efficiency and equality. Efficiency – the property of society getting the most it can from
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Unformatted text preview: its scarce resources, getting the maximum benefits from its scarce resources • Equality – the property of distributing economic prosperity uniformly amoung the members of society • Efficiency refers to the size of the economic pie, and equality refers to how the pie is divided into individual slices. • Progressive taxes – a tax for which high income taxpayers pay a larger fraction of their income than do low income tax payers • Opportunity cost – whatever you give up to obtain an item • Margin -...
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