1.5 KEY TERMS

Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

  1. Interaction
    Equilibrium
    Specialization
    Opportunity cost
    Resource
    Incentive
    Efficient
    Marginal analysis
    Trade
    Scarce
    Trade-off
    Marginal decisions
    Equity
    Gains from trade
    Individual choice
    gains achieved by dividing tasks and trading; in this way people can get more of what they want through trade than they could if they tried to be self-sufficient.
    in short supply; a resource is scarce when there is not enough of the resource available to satisfy all the various ways a society wants to use it.
    fairness; everyone gets his or her fair share. Since people can disagree about what’s “fair,” equity isn’t as well defined a concept as efficiency.
    the decision by an individual of what to do, which necessarily involves a decision of what not to do.
    the situation in which each person specializes in the task that he or she is good at performing.
    anything, such as land, labour, and capital, that can be used to produce something else; includes natural resources (from the physical environment) and human resources (labour, skill, intelligence).
    the study of marginal decisions.
    the real cost of an item: what one must give up in order to get it.
    anything that offers rewards to people who change their behaviour.
    an economic situation in which no individual would be better off doing something different.
    the practice, in a market economy, in which individuals provide goods and services to others and receive goods and services in return.
    a decision made at the “margin” of an activity to do a bit more or a bit less of that activity.
    (of choices) the effect of one individual’s choices upon another’s; a feature of most economic situations. The results of this interaction are often quite different from what the individuals intend.
    a comparison of costs and benefits of doing something.
    description of a market or economy that takes all opportunities to make some people better off without making other people worse off.
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