Scarcity & Factors
The economic condition occurring because consumer wants are unlimited, but productive resources are limited
What is scarcity?
The branch of economics focusing on individual consumers, households, and single firms
What is microeconomics?
The next best alternative given up when making a choice.
What is opportunity cost?
The three basic economic questions every society must answer.
What to produce, how to produce, and for whom to produce?
Highways, national defense, and public parks are funded by taxes as examples of these.
What are public goods?
The main incentive that motivates entrepreneurs to take economic risks
What are profits?
Inflation, national output, and total unemployment fall under this branch of economics
What is macroeconomics?
In economic terms, a decision is considered rational when this outweighs marginal cost.
What is marginal benefit?
The economic system driven primarily by voluntary exchange, private ownership, and competition.
What is a market economy (or capitalism)?
The primary funding source for United States public goods and public assistance programs.
What are tax revenues?
The four main factors of production
What are land, labor, capital, and entrepreneurship?
The factor of production most directly improved when a worker earns a college degree.
What is human capital?
The additional expense or effort involved in producing or consuming one more unit of an item
What is marginal cost?
The system in which a central government body makes major decisions regarding production and distribution
What is a command economy?
Laws passed by Congress to break up monopolies and prevent anti-competitive business actions
What are anti-trust laws?
In the context of baking bread, an oven represents this specific factor of production.
What is (physical) capital?
The study of price determination in local markets is a subject of this branch of economics.
What is microeconomics?
Non-monetary opportunity costs, such as the study time lost by going to a movie.
What is an implicit cost?
The economic structure used by most modern countries, blending market forces with government intervention
What is a mixed economy?
A unintended side effect imposed on an uninvolved third party, such as industrial pollution.
What is a negative externality?
Education, training, job skills, and health contribute directly to this resource.
What is human capital?
National fiscal and monetary policy impacts are studied primarily under this category
What is macroeconomics?
Adam Smith's concept where individuals pursuing self-interest naturally benefit society.
What is the invisible hand?
A reliance on central planning and government regulation is most strongly associated with this economy type.
What is a command economy?
A government policy that provides grants to college students creates this type of side benefit for society.
What is a positive externality?