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AP Microeconomics: Chapter 1

Terms : Hide Images
40584320Scarcitythe limited nature of society's resources.
40584321Economicsthe study of how society manages its scarce resources.
40584322Efficiencythe property of society getting the most it can from its scarce resources.
40584323Equitythe property of distribution economic prosperity fairly among the members of society.
40584324Opportunity Costwhatever must be given up to obtain some item.
40584325Rational Peoplepeople who systematically and purposefully do the best they can to achieve their objectives.
40584326Marginal changessmall incremental adjustments to a plan of action.
40584327Incentivessomething that induces a person to act.
40584328Market Economyan economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.
40584329Property rightsthe ability of an individual to own and exercise control over scarce resources.
40584330Market failurea situation in which a market left on its own fails to allocate resources efficiently.
40584331Externalitythe impact of one person's actions on the well being of a bystander.
40584332Market powerthe ability of a single economic actor (or small group of actors) to have a substantial influence on market price.
40584333Productivitythe quantity of goods and services produced from each hour of a worker's time.
40584334Inflationan increase in the overall level of prices in the economy.
40584335Business cyclefluctuations in economic activity, such as employment and production.

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