CoreMicroeconomics: Exploring Economics pgs: 117
• Benefit: a sense of accomplishment
• Cost: Monetary and Physical risks
• Economics: The study of how individuals, firms, and society make decisions to
allocate limited resources to many competing wants.
• Scarcity: Our unlimited wants clash with limited resources.
• Incentives: The factors that motivate individuals and firms to make decisions in
their best interest.
• Microeconomics: The decision making by individuals, businesses, industries, and
• Macroeconomics: The broader issues in the economy such as inflation,
unemployment and national output of goods and services
• Ceteris Paribus: Assumption used in economics where other relevant factors or
variables are held constant
• Efficiency: How well resources are used and allocated. Do people get the goods
and services they want at the lowest possible resource cost?
• Production efficiency: When goods are produced at the lowest possible cost
• Allocative efficiency: When individuals who desire a product the most get those
goods and services
• Equity: The fairness of var