AP Macroeconomics and AP Microeconomics, Chapter 1 Flashcards

7069304856	Economics	the study of how society manages its scarce resources; the study of how people make decisions	0
7069323193	Efficiency	the property of society getting the most it can from its scarce resources; the use of resources in such a way as to maximize the output of goods and services	1
7069325476	Equity	distributing prosperity fairly among the members of society	2
7069331346	Opportunity Cost	whatever must be given up to obtain some item; the value of the next best alternative that must be forgone as a result of a decision	3
7069337202	Rational People	people who systematically and purposefully do the best they can to achieve their objectives; doing something by logic not on impulse	4
7069347115	Marginal Changes	small incremental adjustments to a plan of action	5
7069349118	Incentive	something that induces a person to act; a reason for doing something; something that stimulates action	6
7069379851	Market Economy	an economy that allocates resources through the decentralized decisions of many first and households as they interact in markets for goods and services; an economic system in which people choose freely what to buy and sell	7
7069438297	Property Rights	the ability of an individual to own and exercise control over scarce resources	8
7069442003	Market Failure	a situation in which a market left on its own fails to allocate resources efficiently	9
7069444704	Externality	the impact of one person's actions on the well-being of a bystander; economic side effect that affects an uninvolved third party	10
7069448171	Market Power	the ability of a single economic actor to have a substantial influence on market prices	11
7069449344	Productivity	the quantity of goods and services produced from each unit of labor input	12
7069452105	Inflation	A general increase in prices across an economy	13
7069453256	Business Cycle	Fluctuations in economic activity, such as employment and production	14
7069456737	Scarcity	the limited nature of society's resources	15
7228089079	Economic System	The method used by a society to produce and distribute goods and services	16
7228090489	Command Economy	An economic system in which the government makes all economic decisions.	17