ECON 101 Study Guide - Midterm Guide: Marginal Utility, Marginal Cost, Invisible Hand
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ECON 101 Full Course Notes
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Document Summary
Chapter 2: circular flow, ppf, normative vs positive, micro macro, scientific method. Chapter 3: absolute and comparative advantage, opportunity cost, imports exports, gains from trade, specialization. Efficiency: the property of society getting the most of it can from its scarce resources. Equity: the property of distributing economic prosperity fairly among the members. Marginal changes: small incremental adjustments 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. Market failure: a situation in which a market left on his own or government fail to allocate scare resources. Externality: the impact of one person"s action on the well being of a bystander, costs or benefits of production or consumption that are experienced by third parties, but not by the producers or consumers who cause them.
