ECON 201 The Miniature Economics Final Exam Questions and Answers
Marginal choice
A small, incremental adjustment to a play of action. Ex) "Should I leave the party now or wait another 10 mins to see if cool people s
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ECON 201 The Miniature Economics Final Exam Questions and Answers
Marginal choice
A small, incremental adjustment to a play of action. Ex) "Should I leave the party now or wait another 10 mins to see if cool people show up?
Economy
Consists of all the choices made by a group of people
Positive statements
Descriptive and attempt to describe the world as it is
Normative statements
Prescriptive and attempt to prescribe how the world should be
Scarcity
Is the limited nature of society's resources
Efficiency
The property of society getting the most it can from its scarce resources
Equality
The property of distributing economic prosperity uniformly among the members of society
opportunity cost
What you give up to get an item
Marginal change
A small incremental adjustment to a plan of action
Incentive
Something that induces a person to act
Market economy
an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services
Property rights
The ability of an individual to own and exercise control over scarce resources
Market failure
a situation in which a market left on its own fails to allocate resources efficiently
2 causes of market failure
externalities and market power
Externality
The impact of one person's actions on the well-being of a bystander and is usually a cause of market failure. Ex) Pollution
Market Power
the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices Ex) Monopoly
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