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Flashcards in Week 1 Deck (16):
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The study of how society manages its scarce resources

Economics

1

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

Efficiency

2

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

Equity

3

Whatever must be given up to obtain an item

Opportunity cost

4

A small incremental adjustment to a plan of action

Marginal change

5

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

Market economy

6

A market in which there are many buyers and many sellers so that each has a negligible impact on the market price.

Competitive market

7

The idea that buyers and sellers freely interacting in a market economy will create an outcome that allocates goods and services to those people who value them most highly and make best use of our resources.

Invisible hand

8

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

Market failure

9

The uncompensated impact of one person's actions on the wellbeing of a bystander. A positive ________ makes the bystander better off. A negative ________ makes the bystander worse off.

Externality

10

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

Market power

11

A market in which there are many buyers and many sellers so that each has a negligible impact on the market price.

Competitive market

12

The idea that buyers and sellers freely interacting in a market economy will create an outcome that allocates goods and services to those people who value them most highly and make best use of our resources.

Invisible hand

13

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

Market failure

14

The uncompensated impact of one person's actions on the wellbeing of a bystander. A positive ________ makes the bystander better off. A negative ________ makes the bystander worse off.

Externality

15

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

Market power