ECN 211 MIDTERM #1 VERIFIED ACCURATE STUDY
GUIDE
market failure - Answers -a situation in which a market left on its own fails to allocate
resources efficiently
economics - Answers -the study of how society manages its scarce resources
incentive - Answers -something that induces a person to act
productivity - Answers -the quantity of goods and services produce from each unit of
labor input
opportunity cost - Answers -whatever must be given up to obtain some item
externality - Answers -the impact of one person's actions on the well-being of a
bystander
Rational People - Answers -those who systematically and purposefully do the best they
can to achieve their objectives
Scarcity - Answers -the limited nature of society's resources
market economy - Answers -an economy that allocates resources through the
decentralized decisions of many firms and households as they interact in markets for
goods and services
business cycle - Answers -fluctuations in economic activity, such as employment and
production
marginal change - Answers -a small incremental adjustment to a plan of action
efficiency - Answers -the property of society getting the most it can from its scarce
resources
market power - Answers -the ability of a single economic actor (or small group of
actors) to have a substantial influence on market press
Equality - Answers -the property of distributing economic prosperity uniformly among
the members of society
property rights - Answers -the ability of an individual to own and exercise control over
scarce resources
GUIDE
market failure - Answers -a situation in which a market left on its own fails to allocate
resources efficiently
economics - Answers -the study of how society manages its scarce resources
incentive - Answers -something that induces a person to act
productivity - Answers -the quantity of goods and services produce from each unit of
labor input
opportunity cost - Answers -whatever must be given up to obtain some item
externality - Answers -the impact of one person's actions on the well-being of a
bystander
Rational People - Answers -those who systematically and purposefully do the best they
can to achieve their objectives
Scarcity - Answers -the limited nature of society's resources
market economy - Answers -an economy that allocates resources through the
decentralized decisions of many firms and households as they interact in markets for
goods and services
business cycle - Answers -fluctuations in economic activity, such as employment and
production
marginal change - Answers -a small incremental adjustment to a plan of action
efficiency - Answers -the property of society getting the most it can from its scarce
resources
market power - Answers -the ability of a single economic actor (or small group of
actors) to have a substantial influence on market press
Equality - Answers -the property of distributing economic prosperity uniformly among
the members of society
property rights - Answers -the ability of an individual to own and exercise control over
scarce resources
