Scarcity & Choices
The condition that forces people to make choices because resources are limited.
What is scarcity?
The value of the next best alternative given up when a choice is made.
What is the definition of opportunity cost?
The model that shows how households and firms interact in two markets.
What is the Circular Flow Model?
Economists often compare themselves to this type of professional.
What is a scientist?
A household choosing between a vacation or a new TV is an example of this.
What is opportunity cost?
The term used to describe making a decision between multiple alternatives.
What is choice?
Choosing between buying a concert ticket or saving for a new phone demonstrates this concept.
What is an example of opportunity cost in personal finance?
The market where households sell labor and other resources.
What is the market for factors of production?
Economists use this approach to simplify reality for analysis.
What are assumptions?
A business choosing between launching two different products faces this.
What is a trade-off or opportunity cost?
The reason why not all wants and needs can be satisfied.
What is limited resources?
This term helps individuals and businesses evaluate what they must sacrifice when making decisions.
What is the role of opportunity cost in decision-making?
The model that illustrates choices between two goods and shows trade-offs.
What is the Production Possibility Frontier (PPF)?
The method economists use to observe and explain behavior in the economy.
What is the scientific method?
A government deciding to spend more on healthcare rather than roads is dealing with this.
What is resource allocation or opportunity cost?
What individuals, businesses, and governments must do because of scarcity.
What is make decisions or prioritize?
A student choosing to study instead of going out with friends experiences this.
What is sacrificing leisure for academic gain?
A point inside the PPF curve represents this.
What is inefficiency or underutilization of resources?
This is what assumptions in economics help do.
What is simplify the real world?
In the Circular Flow Model, firms sell goods in this market.
What is the market for goods and services?
This principle explains why every choice comes with a trade-off.
What is opportunity cost?
A country investing in education instead of the military demonstrates this type of cost.
What is an example of opportunity cost in national policy?
This occurs when the economy moves along the PPF curve from one point to another.
What is opportunity cost or trade-off?
Using simplified models like the Circular Flow is an example of this scientific practice.
What is abstraction or modeling?
In the PPF model, the concept of giving up one good to get more of another is shown by this.
What is opportunity cost?