Microeconomics Chapter 1 Key
Concepts
Scarcity - answersthe limited nature of society's resources
Economics - answersthe study of how society manages its scarce resources
Efficiency - answersthe property of society getting the most it can from its scarce
resources
Equity - answersthe property of distributing economic prosperity fairly among the
members of society
Opportunity Cost - answerswhatever must be given up to obtain some item
Rational People - answerspeople who systematically and purposefully do the best they
can to achieve their objectives
Marginal Changes - answerssmall incremental adjustments to a plan of action
Incentive - answerssomething that induces a person to act
Market Economy - answersan economy that allocates resources through the
decentralized decisions of many firms and households as they interact in markets for
goods and services
Property Rights - answersthe ability of an individual to own and exercise control over
scarce resources
Concepts
Scarcity - answersthe limited nature of society's resources
Economics - answersthe study of how society manages its scarce resources
Efficiency - answersthe property of society getting the most it can from its scarce
resources
Equity - answersthe property of distributing economic prosperity fairly among the
members of society
Opportunity Cost - answerswhatever must be given up to obtain some item
Rational People - answerspeople who systematically and purposefully do the best they
can to achieve their objectives
Marginal Changes - answerssmall incremental adjustments to a plan of action
Incentive - answerssomething that induces a person to act
Market Economy - answersan economy that allocates resources through the
decentralized decisions of many firms and households as they interact in markets for
goods and services
Property Rights - answersthe ability of an individual to own and exercise control over
scarce resources
