Brief Principles of Macroeconomics Sixth Edition by N. Gregory Mankiw (Chapter 1)

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Scarcity
The limited nature of society’s recources
Economics
Study of how societies decide what to produce, how to produce it, and how to distribute what they produce
Efficiency
The property of society getting the most it can from its scarce resources
Equality
The property of distributing economics prosperity uniformly among the members of society
Opportunity Cost
Whatever must be given up to obtain some item
Rational People
People who systematically and purposefully do the best they can to achieve their objectives.
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
Externality
The impact of one person’s actions on the well-being of bystander.
Market Power
The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices.
Productivity
The quantity of goods and services produced from each unit of labor input.
Inflation
An increase in the overall level of prices in the economy.
Business Cycle
Fluctuations in the economic activity, such as employment and production.
Categories: Macroeconomics