Scarcity and Choice
This exists because resources are limited, but human wants are unlimited
What is scarcity
This is what you give up to get something
What is opportunity cost
Because of this, people can consume more than they can consume alone
What are gains from trade
The four resources of production are land, labor, capital, and...
What is entrepreneurship
If households and businesses suddenly stop spending, this economic downturn will result in income and employment falling
What is a recession
This term describes anything that can be used to produce something else
Decisions about a little more or a little less are made here
What is at the margin
This occurs when supply equals demand
What is equilibrium
Natural resources fall under this category of resources
What is land
This principle explains why a decrease in business spending can lead to layoffs, lower incomes, and even further decreases in spending
In a market system, this is what rations scarce goods
What is price
This compares the costs and benefits of doing something
What is a trade-off
When each person focuses on what they do best, it's called
What is specialization
What are monetary policy and fiscal policy
When total spending exceeds productive capacity, this may occur
What is inflation
When there isn't enough of a resource to satisfy all desired uses
What is scarce
The study of decisions made at the margin is this
What is marginal analysis
When individuals or countries focus on producing the goods or services for which they have the lowest opportunity cost, they maximize gains through trade through this concept
What is comparative advantage
This refers to everyone getting their fair share
What is equity
This type of government action, such as stimulus checks or public work programs, can boost spending when the economy slows
What is government intervention to change spending
Because scarcity exists, people must always
What is make choices
This is anything that motivates people to change their behavior
What is an incentive
This principle states that markets usually produce this outcome
What is efficency
When markets fail to achieve efficency this may improve society's welfare
What is government intervention
This type of government, exemplified by the US Works Progress Administration, shows how policies can directly provide jobs and income to increase overall spending
What is government-funded job creation