Incentive
________: something that induces a person to act, such as a reward or punishment.
Pollution
What is negative, education is positive)
Central planning
________: only the government can organize economic activity that promotes everyones well- being.
Externalities
________ can be an unpriced benefit or cost (ex.
Rational decision maker
________ takes action only if the actions marginal benefit> marginal cost.
Inflation
________: an increase in the overall levels of prices in the economy.
Business cycle
________: the irregular and unpredictable fluctuations in economic activity, measured by production of goods /services OR # people employed.
Rational people
________ make decisions by comparing marginal benefits and marginal costs.
Trade
Principles of Microeconomics Chapter 1 Ten Principles of Economics Ch.1- Ten Principles of Economics. ________ allows each person to specialize in what he /she does best, so people can buy a greater variety of goods and services at lower cost.
Opportunity cost
________: what you give up to get that item.
Economic policy
________ can determine amount government spends /taxes /quantity of money → influence demand for goods /services → affect inflation /unemployment.
Higher demand
________ may later cause firms to raise prices, but also makes them hire more workers and produce more goods /services.
Efficiency
________: absent of waste.
Marginal change
________: a small incremental adjustment to an existing plan of action.
Equality Public policies
[________ aim to achieve more equal distribution of economic well- being.
Equality government
[________ can sometimes be corrupt; designed to only reward the powerful 1- 3 How the Economy as a Whole Works.
Marginal cost
________: the price of adding one additional unit.
Marginal benefit of RARE items
What is large? Answer with a single words or term.
Rational people
________: people who systematically and purposefully do the best they can to achieve their goals given the opportunities.