Question

This document is for economic's study guide. Please write down each of the definitions asked below.

Answer 1

• Scarcity – The limitation nature of society’s resources. 

 

• Economics – It is the study about how can a society handles their scarce resources. 

 

• Efficiency – The property of society obtaining the most it can from its scare resources. 

 

• Equity – The property of distributing economic prosperity fairly towards its members in a specific society. 

 

• Opportunity cost – It is something that must be given in order to gain some product or item. 

 

• Market economy - An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services. 

 

• Inflation - An increase in the overall level of prices in the economy.

 

• Microeconomics - The study of how households and firms make decisions and how they interact in markets. 

 

• Macroeconomics - The study of economy wide phenomena, including inflation, unemployment, and economic growth. 

 

• Specialization - To focus on a particular area. 

 

• Absolute advantage - The comparison among producers of a good according to their productivity. 

 

• Imports - goods produced abroad and sold domestically. 

 

• Exports - goods produced domestically and sold abroad. 

 

• Law of demand - the claim that, other things equal, the quantity demanded of a good fall when the price of the good rises. 

 

• Normal good - a good for which, other things equal, an increase in income leads to an increase in demand. 

 

• Inferior good - a good for which, other things equal, an increase in income leads to a decrease in demand. 

 

• Law of supply – The claim that, other things equal, the quantity supplied of a good rise when the price of the good rises. 

 

• Equilibrium - a situation in which the price has reached the level where quantity demanded equals quantity supplied. 

 

• Shortage - a situation in which quantity demanded is greater than quantity supplied. 

• Scarcity

• Economics

• Efficiency

• Equity

• Opportunity cost

• Market economy

• Inflation

• Macroeconomics

• Microeconomics

• Specialization