Principles of Economics – Trade-offs, Efficiency & Equality

Vocabulary flashcards summarizing key terms and examples from the lecture on trade-offs and the efficiency versus equality debate in economics.

People Face Trade-offs

A core economic principle stating that choosing one goal or activity usually means giving up another.

Trade-off

A situation where more of one desirable thing means less of another (e.g., high quality versus low price).

Efficiency

The condition in which society extracts the maximum possible benefit from its scarce resources.

Equality

A state where economic prosperity is distributed uniformly among all members of society.

Equity (Economic)

Fairness in the distribution of economic benefits; often discussed alongside or as a nuance of equality.

Scarce Resources

Limited inputs (land, labor, capital, entrepreneurship) that restrict the amount of goods and services a society can produce.

High Quality vs. Low Price

A common consumer trade-off where improving product quality usually leads to higher costs and prices.

Environment vs. Industry

A societal trade-off between protecting natural resources and promoting industrial growth and jobs.

Work vs. Relax

An individual time-allocation trade-off between earning income and enjoying leisure.

Now vs. Later

An intertemporal trade-off between immediate consumption and future benefits, such as saving for retirement.