unit 1 quiz 1 vocab Flashcards
(20 cards)
Scarcity
Limited resources relative to wants for production services.
What is economics?
A social science concerned with how resources are used to satisfy peoples wants.
Trade-offs
A choice between alternative uses of a given quantity of a resource.
Opportunity costs
The value of the best alternative not chosen.
Production possibilities frontier
used to illustrate the impact of scarcity on the economy.
Constant Cost
Your opportunity cost is always the same.
Increasing cost
opportunity costs increase as you produce more of a given product.
Market Economy
an economic system in which the basic economic questions in what, how, and for whom to produce are resolved primarily by buyers and sellers.
centrally directed economy
an economic system in which the basic economic questions are resolved by the government.
Traditional Economy
The economic system which the basic economic questions are resolved by traditions and customs.
Mixed Economy
The economic system in which the basic economic questions are resolved by market system.
What kind of economic system does the US have?
The US is a mixed economy that is heavily dependent on the market system.
Efficiency
to obtain the greatest outcome possible with scarce resources.
Price stability
to avoid huge fluctuations in the general price level of goods and services.
Full employment
almost everyone that wants a job has a job.
Economic growth
The increase in the capacity of the economy to produce goods and services.
Absolute advantage
when one producer can produce a product more efficiently than another producer.
Comparative advantage
both producers gain when they produce the goods they have the lower opportunity cost in producing.
Specialization
A situation in which workers concentrate their efforts in areas they have an advantage.
Interdependence
The reliance of different individuals in businesses on each other.
