Chapter 1-6 Vocabulary

Chapter 1-6 Vocabulary - Economics 201: Chapter One...

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Economics 201: Chapter One Vocabulary 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 Cost : whatever must be given up to obtain some item. Rational People : people who systematically and purposefully do the best they can 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. 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 produces from each hour of a worker’s time. Inflation : an increase in the overall level of prices in the economy. Business Cycle
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This note was uploaded on 04/07/2008 for the course ECON 201 taught by Professor Douglas during the Spring '07 term at WVU.

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Chapter 1-6 Vocabulary - Economics 201: Chapter One...

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