Flashcards in Micro chapter 1 Deck (24):
A reward or punishment
Individuals who make the best choices based on goals
Resources priced by demand
The right to own any good
How one persons actions affects others
What is an example of externality?
Company dumping waste in the river
-therefore it affects drinking water and kids cannot swim in a river
Who decides the price of a good in a market economy?
Market that fails to distribute resources efficiently
Resources that are distributed equally
Economy has limited resources
How is scarcity applied?
When people cannot have all the goods they want
What is an example of a business cycle?
A recession due to less jobs being available
Resources that are used to its fullest potential
What is an example of productivity
Most productive I take 5 shots of vodka in 20 minutes
If I take 4 shots I am not reaching my fullest potential
giving up one thing for the other
The movement in economic activity
What is an example of market failure?
When the government prices items instead of the consumer (cigarettes)
When a firm or person influences market prices
When prices increase in an economy
What you produce given the amount of work
Cost of what you give up
What is an example of market power?
Study of how an economy manages scarcity