Microecon Ch 1
Terms
undefined, object
copy deck
- economy
- a system for coordinating society's productive activities
- economics
- the social science that studies the production, distribution, and consumption of goods and services
- market economy
- an economy in which decisions about production and consumption are made by individual producers and consumers
- invisible hand
- the individual pursuit of self-interest can lead to good results for society as a whole
- microeconomics
- studies how people make decisions and how these decisions interact
- market failure
- when the individual pursuit of self-interest leads to bad results for society as a whole
- recession
- a downturn in the economy
- macroeconomics
- the study of overall ups and downs in the economy
- economic growth
- the growing ability of the economy to produce goods and services
- individual choice
- the decision of an individual of what to do, which necessarily involves a decision of what not to do
- resource
- anything that can be used to produce something else
- scarcity
- there is not enough resources available to satisfy all the various ways a society wants to use them
- opportunity cost
- what you must give up in order to get something
- trade-off
- comparing the costs with the benefits of doing something
- marginal decisions
- decisions about whether to do a bit more or a bit less of an activity
- incentive
- anything that offers rewards to people who change their behavior
- trade
- providing goods and services to others to receive goods and services in return
- gains from trade
- people can get more of what they want through trade than they could if they tried to be self-sufficent
- equilibrium
- when no individual would be better off doing something different
- efficiency
- when all opportunities to make some people better off without making others worse off are taken
- equity
- everyone gets his or her fair share