Scarcity & Choice
This economic condition exists because wants are unlimited but resources are limited.
What is scarcity?
The most valued alternative given up when a choice is made.
What is opportunity cost?
This graph shows all possible combinations of two goods an economy can produce.
What is a production possibilities frontier (PPF)?
Economists believe people compare these two things when making decisions.
What are costs and benefits?
Physical items such as cars, clothing, and computers.
What are goods?
Because scarcity exists, people and societies must do this.
What is make choices?
Opportunity cost refers to this alternative—not every possible one.
What is the next best alternative?
Points on the PPF represent this.
What is efficient production?
A person usually chooses an action only if this is true.
What is benefits are greater than costs?
Actions done for others, such as teaching or haircuts.
What are services?
Choosing one thing means giving up another. Economists call this a _____.
What is a trade-off?
True or False: Opportunity cost must involve spending money.
What is false?
Points inside the PPF represent this problem.
What is inefficient use of resources?
Something that encourages or discourages behavior.
What is an incentive?
Natural resources like water, forests, and minerals.
What is land?
Scarcity would not exist if this were true.
What is that resources were unlimited (or wants were limited)?
If you study instead of going to a party, this is the opportunity cost.
What is the party you gave up?
Points outside the PPF are considered _____.
What is unattainable?
When the cost of an activity increases, economists predict this.
What is people are less likely to do it?
Tools, machines, and factories used to produce goods.
What is capital?
Scarcity affects this group—even wealthy individuals.
Who is everyone?
Choosing college instead of a full-time job shows opportunity cost can include this.
What is lost income (or time/earnings)?
The PPF illustrates these three economic ideas.
What are scarcity, choice, and opportunity cost?
This branch of economics studies individual people and businesses.
What is microeconomics?
The factor of production that involves risk-taking and organizing resources.
What is entrepreneurship?