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100 Economics Terms

Terms in this set (100)

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
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
Externality
the impact of one person's actions on the well being of a bystander
Inflation
an increase in the overall level of prices in the economy
Phillips curve
a curve that shows the short run tradeoff between inflation and unemployment
Business cycle
fluctuations in economic activity, such as employment and production
Circular flow diagram
a visual model of the economy that shows how dollars flow through markets and firms
Production possibilities curve
a graph that show the combinations of output that the economy can possibly produce given the available factors of production and the available production technology
Microeconomics
the study of how households and firms make decisions and how they interact in markets
Macroeconomics
the study of economy wide phenomena, including inflation, unemployment, and economic growth
Positive statements
claims that attempt to describe the world as it is
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