chapter 1 section 3 Flashcards
(13 cards)
what are trade offs
alternative choices
opporrtunity cost
cost of the next best alternative
two types of economic choices
trade offs and opportunity cost
what is a decision making grid
a way to analyze an economic problem
helps you consider alternatives (trade offs)
makes you evaluate each alternative based on criteria
what is a production possibilities frontier
A diagram representing various combinations of goods and services in an economy can produce when all its resources are in use
What happens when the production of one item increases
The production of other items decreases
What is the only way to expand the production possibilities frontier
to attain economic growth
what is an economic model
A simplified equation graph or figure showing how something works
models are based on what
assumptions
what is cost benefit analysis?
A way of comparing the cost of an action to the benefits received
Most economic decision decisions are evaluated using what
Cost benefit analysis
what is a free enterprise economy
An economy where consumers and privately own businesses rather than the government make them majority of the what how and for whom to produce decisions
what is standard of living?
The quality of life based on the ownership of the necessities and luxuries that make life easier
