Economics

4. the impact of one person's actions on the well being of a bystander
6. curve a curve that shows the short run tradeoff between inflation and unemployment
7. cycle fluctuations in economic activity, such as employment and production
8. the study of how society manages its scarce resources
11. the study of how households and firms make decisions and how they interact in markets
12. the property of society getting the most it can from its scarce resources

1. economy an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services
2. the study of economy wide phenomena, including inflation, unemployment, and economic growth
3. cost whatever must be given up to obtain some item
4. the property of distributing economic prosperity fairly among the members of society
5. an increase in the overall level of prices in the economy
9. flow diagram a visual model of the economy that shows how dollars flow through markets and firms
10. possibilities curve a graph that show the combinations of output that the economy can possibly produce given the available factors of production and the available production technology