Introduction to Economics

These flashcards cover key concepts and definitions related to the principles of economics as outlined in the lecture notes.

Economics

The study of how society manages its scarce resources and the choices made by market participants.

Scarcity

The situation where unlimited human wants contrast with limited resources.

Opportunity Cost

Whatever must be given up to obtain some item.

Trade-offs

Making decisions requires trading off one goal against another.

Marginal Changes

Small incremental adjustments to a plan of action.

Incentives

Something that induces a person to act.

Market Economy

A system in which economic decisions are made through decentralized decisions of many firms and households, guided by prices and self-interest.

Property Rights

Ability of an individual to own and exercise control over scarce resources.

Inflation

An increase in the overall level of prices in the economy.

Positive Statements

Descriptive statements that attempt to describe the world as it is, and can be confirmed or refuted by evidence.

Normative Statements

Prescriptive statements that attempt to prescribe how the world should be, often involving value judgments.