ME - Week 1

A set of flashcards focusing on key vocabulary and concepts in microeconomics derived from the lecture notes.

Microeconomics

The study of individual choices and how they interact in markets regarding prices, incentives, efficiency, and market outcomes.

Opportunity Cost

The value of the next best alternative that is forgone when making a decision.

Trade-off

The concept that in order to gain something, an individual or society must give up something else.

Marginal Thinking

The process of comparing the additional benefits of a choice against the additional costs associated with that choice.

Sunk Cost

A cost that has already been incurred and cannot be recovered, which should not influence future decisions.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Incentives

Factors that motivate individuals to make decisions, which can be financial or non-financial.

Economic Efficiency

A situation where resources are allocated in a way that maximizes total benefits received by all stakeholders.

Participatory Learning

An educational approach that emphasizes active participation and collaboration among students during learning.

Marginal Benefits

The additional satisfaction or utility that a person receives from consuming one more unit of a good or service.

Marginal Costs

The cost of producing one more unit of a good or service.

Externality

A side effect or consequence of an industrial or commercial activity that affects other parties without being reflected in the cost of the goods or services involved.

Phillips Curve

A concept that illustrates the inverse relationship between inflation and unemployment in an economy.

Decentralized Economy

An economic structure in which decisions are made at various levels rather than being concentrated at a central authority.

Scarcity and Choice

The principle that scarcity necessitates choices about how to allocate resources effectively.

Specialization

The process of focusing on a particular area of production or skill, which can lead to increased efficiency and productivity.

Government Intervention

Actions taken by government to correct market failures and promote social welfare.

Standard of Living

The degree of wealth and material comfort available to a person or community, often measured by income and living conditions.

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.