Lecture 1/ Chapter 1 Flashcards Preview

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Flashcards in Lecture 1/ Chapter 1 Deck (17)
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1
Q

Positive Statement

A

A statement of fact. Claims that attempt to describe the world as it is

2
Q

Normative Statement

A

A statement of value. Claims that attempt to prescribe how the world should be

3
Q

Behavioral outcomes

A

Efficiency

4
Q

Redistributive outcomes

A

Equity

5
Q

Scarcity

A

The limited nature of society’s resources

6
Q

Externailty

A

The impact of one person’s actions on the well- being of a bystander

7
Q

Equality

A

The property of distributing economic prosperity uniformly among the members of society

8
Q

Opportunity Cost

A

Whatever must be given up to obtain some item

9
Q

Efficiency

A

The property of society getting the most it can from its scarce resources

10
Q

Inflation

A

An increase in the overall level of prices in the economy. When a government creates large quantities of the nation’s money, the value of the money falls.

11
Q

Market Failure

A

A situation in which a market left on its own fails to allocate resources efficiently

12
Q

Market Economy

A

An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

13
Q

Property Rights

A

The ability of an individual to own and exercise control over scarce resources

14
Q

Productivity

A

The quantity of goods and services produced from each unit of labor input

15
Q

Economics

A

The study of how society manages its scarce resources

16
Q

Market Power

A

The ability of a single economic actor or group to have a substantial influence on market prices

17
Q

Incentive

A

Something that induces a person to act