| Term | Definition |
|---|
| scarcity | the limited nature of society's resoures |
| 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 |
| 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 produced from each hour of a worker's time |
| inflation | an increase in the overall level of prices in the economy |
| business cycle | fluctuations in economic activity, such as employment and production |
Combine with other sets
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