Ch.1 fill in the blank

These flashcards summarize key concepts from the lecture on the ten principles of economics.

Scarcity is the __________ nature of society’s resources.

limited

Economics is the study of how society manages its __________ resources.

scarce

Principle 1 states that people face __________.

trade-offs

Principle 2 states that the cost of something is what you give up to __________ it.

get

Rational people think at the __________.

margin

Principle 4 states that people respond to __________.

incentives

To achieve greater equality could reduce the __________ to work and produce.

incentive

The opportunity cost of going to college includes __________, books, and foregone earnings.

tuition

Principle 5 states that trade can make everyone __________ off.

better

Markets usually organize economic activity through the decentralized decisions of many __________ and households.

firms

Adam Smith’s __________ explains how prices adjust to guide market participants.

invisible hand

Governments can improve market outcomes by enforcing __________ rights.

property

Market failures can occur due to __________ or market power.

externalities

The standard of living in a country depends on its ability to produce __________ and services.

goods

Inflation occurs when the government prints too much __________.

money

There is a short-run trade-off between __________ and unemployment.

inflation