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17 Cards in this Set
- Front
- Back
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Scarcity |
Limited quantities of resources to meet unlimited wants |
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Shortage |
A situation in which a good or service is unavailable |
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Factors of production |
Land, labor, and capital; the three groups od resources that ate used to make all goods and services |
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Scarcity and Choice section |
Since people cannot have all their needs and wants simultaneously, they must pick and choose what to spend money on due to scarcity |
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Scarcity section |
All goods and services are scarce, meaning there is a limit to everything. Scarcity is a constant state since resouce supply will always be less than our wants and needs |
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Shortage section |
When producers cannot offer goods and services at current prices. Can be short or long term. |
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Trade off |
An alternative that we sacrifice when we make a decision |
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Guns or butter |
A phrase that refers to the tradeoffs that nations face when choosing whether to produce more or less military or consumer goods |
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Opportunity cost |
the most desireable alternative given up as the result of a decision |
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Thinking at the margin |
Deciding wheter to do or use one additional unit of some resource |
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Trade off section |
When you trade one favorable outcome for another. Everything Has a trade off. When given a decision you can't have both |
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Opportunity cost section |
The OC is the thing you gave up in the trade off. To determine an opportunity cost, you can make a grid Benefit > OC = good Benefit < OC = Bad |
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Production possibilities curve |
A graph that shows alternative ways to use an economy's resources |
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Production possibilities frontier |
The line on a productions possibility graph/curve that shows the maximum possible output |
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Cost |
To an economist, the alternative that is given up because of a decision |
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Law of increasing costs |
law that states that as we shift factors of production from making one good or service to another, the cost of producing the second item increases |
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Production possibilities section |
Production possibilities curves help economists to analyze the choices and trade offs that people make. This is because the graph shows alternative ways to use an economys productive resources. |
