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