ECN 211 Midterm #1 questions with correct answers

market failure Correct Answer-a situation in which a market left on its own fails to allocate resources efficiently economics Correct Answer-the study of how society manages its scarce resources incentive Correct Answer-something that induces a person to act productivity Correct Answer-the quantity of goods and services produce from each unit of labor input opportunity cost Correct Answer-whatever must be given up to obtain some item externality Correct Answer-the impact of one person's actions on the well-being of a bystander Rational People Correct Answer-those who systematically and purposefully do the best they can to achieve their objectives Scarcity Correct Answer-the limited nature of society's resources market economy Correct Answer-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 Correct Answer-fluctuations in economi