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  1. Scarcity
    Resources are limited. We cannot produce/consume all the goods and services we wish to have
  2. Choies
    Choices must be made when allocating society’s scarce resource
  3. Economics
    The study of how society manages its scarce resource
  4. Efficiency
    Getting the max benefit from scarce resources.
  5. Equality
    When benefits are traded uniformly among society's members.
  6. Tradeoff
    To achieve greater equality, could redistribute income from wealthy to poor. But this reduces incentive to work and produce, shrinks the size of the economic “pie.”
  7. Opportunity Cost
    What you must give up to obtain it.
  8. Marginal Benefit
    The benefit from an additional unit of a good.
  9. Marginal Cost
    The cost of obtaining an additional unit of good.
  10. Market
    A group of buyers and sellers.
  11. Market Economy
    Decisions are made by many buyers and many sellers, not by a centralized entity.
  12. Market Failure
    When a market fails to allocate an economy's resources effeciently.
  13. Externalities
    When the production or consumption of a good affects bystanders. i.e. pollution.
  14. Market Power
    When a single buyer or seller has substantial influence on market price. i.e. monopoly.
Card Set
Chapter 1: Ten Principles of Economics
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