Demand
This fundamental law states that as the price of a good decreases, the quantity demanded will do this.
What is increase?
Scarcity exists because human wants are unlimited, but these are limited.
What are resources?
When you choose between two options, opportunity cost is the value of the option you decide to do this to.
What is give up (or miss out on)?
Opportunity cost is best defined as the value of the next best option that is this.
What is given up (or sacrificed)?
This term refers to the paper notes and coins used to buy goods and services.
What is money (or currency)?
This term describes a good whose demand drops when consumer income rises, like off-brand ramen noodles.
What is an inferior good?
Land, labor, capital, and entrepreneurship are collectively known as these four factors.
What are the Factors of Production?
Payments made by a government to a business to encourage production are known as these.
What are subsidies?
This simple frontier model graph shows the trade-offs between producing two different goods.
What is a Production Possibilities Curve (or Frontier/PPC)?
This study focuses on how people, businesses, and governments make choices about how to use their money and resources.
What is economics?
On a standard economic graph, the demand curve typically slopes in this direction.
What is downward?
Unlike a temporary shortage, scarcity is considered to be this type of condition in economics.
What is permanent (or universal)?
The point where the supply curve and demand curve intersect is called this.
What is equilibrium (or market equilibrium)?
Money already spent that cannot be recovered and should not influence future decisions is known as this cost.
What is a sunk cost?
When prices across the economy continuously go up over time, making your money buy less, it is called this.
What is inflation?
If a small change in price leads to a massive change in the quantity demanded, the demand is said to be this.
What is elastic?
This type of capital includes machinery, tools, and factories used to make other goods.
What is physical capital?
A government-imposed legal maximum price on a good or service (like rent control) is called this.
What is a price ceiling?
If you stay up late studying for an exam, the sleep you gave up is an example of this economic concept.
What is opportunity cost?
A person who buys and uses goods or services is called a consumer, while the person or business that makes them is called this.
What is a producer?
Goods like peanut butter and jelly that are consumed together are known by this term.
What are complementary goods?
This fundamental economic question asks how scarce resources are divided up among competing users.
What is allocation?
When the quantity supplied is greater than the quantity demanded, this market condition occurs.
What is a surplus?
This simple chart shows the trade-offs an economy faces when choosing to produce only two different goods, like guns or butter.
What is a Production Possibilities Curve (or PPC / Frontier)?
Adam Smith famously described the unseeable market force that drives supply and demand as this "phantom" body part.
What is the invisible hand?