Term
| 4 principles that underlie the economics of individual choice |
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Definition
1. resources are scarce
2. the real cost of something is what you must give up to get it
3. "how much?" is a decision at the margin
4. people usually exploit opportunities to make themselves better off |
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Term
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Definition
| the decision by an individual of what to do, which necessarily involves a decision of what not to do |
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Definition
| anything that can be used to produce something else |
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Definition
| there is not enough of the resources available to satisfy all the various ways a society wants to use them |
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Definition
| what you must give up in order to get an item |
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Term
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Definition
| when you compare the costs with the benefits of doing something |
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Definition
| decisions about whether to do a bit more or a bit less of an activity |
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Term
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Definition
| the study of marginal decisions |
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Term
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Definition
| anything that offers rewards to people who change their behavior |
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Term
| all economic activities involve _____ |
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Definition
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Term
| people must make choices because _____ are _____ |
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Definition
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Term
| the real cost of something is what you must give up to get it - specifically, giving up your next best alternative; all costs are _____ |
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Definition
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Term
| "how much" choices are made by making a _____ at the margin |
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Definition
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Term
| the study of _____ is known as marginal analysis |
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Definition
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Term
| because people usually exploit opportunities to make themselves better off, _____ can change people's behavior |
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Definition
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Term
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Definition
| my choices affect your choices, & vice cersa; a feature of most economic situations |
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Term
| 5 principles that underlie the interaction of individual choices |
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Definition
1. there are gains from trade
2. markets move toward equilibrium
3. resources should be used at efficiently as possible to achieve society's goals
4. markets usually lead to efficiency
5. when markets don't achieve efficiency, government intervention can improve society's welfare |
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Term
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Definition
| individuals provide goods & services to others & receive goods & services in return |
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Term
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Definition
| people can get more of what they want through trade than they could if they tried to be self-sufficient |
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Definition
| each person specializes in the task that he or she is good at performing |
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Definition
| when no individual would be better off doing something different |
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Definition
| an economy that takes all opportunities to make some people better off without making other people worse off |
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Term
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Definition
| everyone gets his or her fair share |
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Term
| a feature of most economic situations is the _____ of choices made by individuals, the end result of which may be quite different from what was intended |
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Definition
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Term
| in a market economy, interaction takes the form of _____ between individuals |
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Definition
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Term
| individuals interact because there are _____ |
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Definition
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Term
| gains from trade arise from _____ |
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Definition
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Term
| economic situations normally move toward _____ |
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Definition
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Term
| as far as possible, there should be an _____ use of resources to achieve society's goals |
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Definition
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Term
| efficiency is not the only way to evaluate an economy; _____ may also be desirable |
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Definition
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Term
| 3 principles that underlie economy-wide interactions |
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Definition
1. one person's spending is another person's income
2. overall spending sometimes gets out of line with the economy's productive capacity
3. government policies can change spending |
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