ECON 1001 Fall Midterm (Chap. 1) - Carleton University Questions With 100% Correct Answers.

Business Cycle - fluctuations in economic activity, such as employment and production Economics - the study of how society manages its scarce resources Efficiency - the property of society getting the most it can from its scarce resources Equity - the property of distributing economic prosperity fairly among the members of society Externality - The impact of one person's actions on the well-being of a bystander Incentive - something that induces a person to act Inflation - an increase in the overall level of prices in the economy Marginal Changes - small incremental adjustments to a plan of action 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 Market Failure - a situation in which a market left on its own fails to allocate resources efficiently Market Power - the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices Opportunity Cost - whatever must be given up to obtain some itemProductivity - the quantity of goods and services produced from each hour of a worker's time Property Rights - the ability an individual to own and exercise control over scarce resources Rational People - those who systematically and purposefully do the best they can to achieve their objectives Scarcity - the limited nature of society's resources