ECO 210 Notes Chapter 1

ECO 210 Notes Chapter 1 - so individuals can own and...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
ECO 210 Notes Chapter 1: Ten Principles of Economics Efficiency (societal) – society is getting the maximum benefits from its scarce resources. Equality – benefits are distributed uniformly among society’s members Opportunity Cost – an item is what you give up to get that item. Rational People – systematically and purposefully do the best they can to achieve their objectives, given the available opportunities. Marginal Change – describe a small incremental adjustment to an existing plan of action. Incentive – something that induces a person to act, such as the prospect of a punishment or a reward. Market Economy – the decisions of a central planner are replaced by the decisions of millions of firms and households. Property Rights
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: so individuals can own and control scarce resources. Market failure refers to a situation in which the market on its own fails to produce an efficient allocation of resources. Externality impact of one persons actions on the well-being of a bystander. Market Power which refers to the ability of a single person (or small group) to unduly influence market prices. Productivity amount of good and services produced from each unit of labor input. Inflation increase in the overall level of prices in the economy. Business-cycle the irregular and largely unpredictable fluctuations in economic activity, as measured by the production of goods and services or the number of people employed....
View Full Document

Ask a homework question - tutors are online