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| The property of society getting the most it can from its scarce resources. |
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| The property of distributing economic prosperity uniformly among the members of society. |
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| Whatever must be given up to obtain some item. |
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| People who systematically and purposefully do the best they can to achieve their 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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| 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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| 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 own fails to allocate resources efficiently. |
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| The uncompensated impact of one person's actions on the well-being of a bystander. |
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| The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices. |
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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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Definition
| Fluctuations in economic activity, such as employment and production. |
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Term
| How People Make Decisions |
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Definition
1: People Face Trade-offs
2: The Cost of Something Is What You Give Up to Get It
3: Rational People Think at the Margin
4: People Respond to Incentives |
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Term
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Definition
5: Trade Can Make Everyone Better Off
6: Markets Are Usually a Good Way to Organize Economic Activity
7: Governments Can Sometimes Improve Market Outcomes |
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Term
| How the Economy as a Whole Works |
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Definition
8: A Country's Standard of Living Depends on Its Ability to Produce Goods and Services
9: Prices Rise When the Government Prints Too Much Money
10: Society Faces a Short-Run Trade-off between Inflation and Unemployment |
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