Everyday Decisions
A student spends money on concert tickets instead of saving for a phone, this problem forces the choice.
What is scarcity?
Prices rise and fall because buyers and sellers freely make choices.
What is a Market Economy?
A graph shows that producing more robots means producing fewer cars.
What is the Production Possibilities Curve?
The usefulness a phone provides to its owner.
What is Utility?
More people want hoodies when the weather turns cold.
What is Demand?
Choosing to work after school instead of playing sports means giving up practice time.
What is opportunity cost?
The government decides how many cars are made and how much they cost.
What is a Command Economy?
Producing 10 bikes costs a company $2,000 in total.
What is Total Cost?
The total advantage gained from attending college over a lifetime.
What is Total Benefit?
When income rises, people buy more brand-name clothes.
What are Normal Goods?
Deciding whether to buy a video game by weighing its price against how much fun it will be.
What is cost-benefit analysis?
The true cost of a decision is the value of the next best alternative that must be given up.
What is opportunity cost?
The extra happiness gained from eating one more cookie.
What is Marginal Utility?
As someone eats more candy, each piece feels less exciting than the last.
What is Diminishing Marginal Utility?
This curve shows the relationship between a good’s price and the quantity that consumers are willing and able to buy.
What is the demand curve?
Buying one more slice of pizza only if it’s worth the extra cost.
What is Marginal Analysis?
One country makes both cars and computers faster than another country.
What is Absolute Advantage?
A general increase in prices and fall in the purchasing value of money.
What is inflation?
A business adds workers until the extra worker adds less value than they cost.
What are Marginal Cost/Marginal Benefit?
If the price of soda rises, people buy more juice instead.
What are Substitute Goods?
A factory compares the extra cost of producing one more pair of shoes to the extra money earned.
What is Marginal Cost/Marginal Benefit?
A country focuses on making the product it gives up the least to produce.
What is Comparative Advantage?
The total satisfaction from eating three slices of pizza.
What is Total Utility?
The sum of all satisfaction received from consuming a product over time.
What is Total Utility?
When the price of printers falls, sales of ink cartridges rise.
What are Complement Goods?