Microeconomics chapter1-2-3-4 key concepts questions with verified answers

Microeconomics chapter key concepts




Scarcity - answersthe limited nature of societies 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

Equality - answersthe property of distributing economic prosperity uniformely among the
member of society

Opportunity cost - answerswhatever must be given up to get something else

Rational people - answerspeople who systematically and purposefully do the best they
can to achieve their objectives

Marginal change - answersa small incremental adjustment 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 ans services

Property rights - answersthe ability of an individual to own and exercise control over
scarce resources

Market failure - answersa situation in which a market left on its own fails to allocate
resources efficiently