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Definition
| the limited nature of societys resources |
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| the study of how societyt manages its scarce resources |
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| people face trade-offs (trading one thing for another) |
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| the property of society getting the maxium benefits from its scarce resources |
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| the property of disturbing economic prosperoty uniformly among the members of society |
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Definition
| the cost of something is what you give up to get it |
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| whatever must be given up in order to obtain some item |
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| Rational people think at the Margin |
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| systematically and purposefully doing the best you can to achieve your objectives |
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| small incremental adjustments to a plan of action |
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| something that induces a person to act |
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| people respond to incentives |
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| Trade can make everyone better off |
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| Markets are usually a ggod way to organize economic activity |
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| an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services |
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| Governments can sometimes improve market outcomes |
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| the ability of an individual to own and exercise control over scarce resources |
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| a situation in which a market left on its oen fails to allocate resources efficiently |
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| a countrys standard of living depends on its ability to produce goods and sevices |
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| the quantity of goods and services produced from each unit of labor input |
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| an increase in the overall level of prices in the economy |
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| society faces a run trade off between inflation and unemployment |
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| the study of how households and firms make decisions |
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| the study of economy-wide phenomena, including inflation, unemployment, and economic growth |
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| claims that attempt to describe the world as it is |
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| claims that attempt to prescribe how the world should be |
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Definition
| a measure of the responsiveness of quantity dmenaded or quantity supplied to one of its determinants |
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| price elasticity of demand |
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| a measure of how much the quantity demanded of a good responds to a change in the price of that good |
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Definition
| the amount paid by buyers and received by sellers of a good, computed as the rice of the good times the quantity sold |
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Definition
| if demand is inelastic, the percentage change in price will be greater than the percentage change in quantity demanded |
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Definition
| if price rises, quantity demanded falls, and toal revenue will rise (because the increase in price will be larger than the decrease in quantity demanded) |
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Definition
| if price falls, quantity demanded rises, and total revenue will fall (because the fall in price will be larger than the increase in quanitity demanded) |
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