Basics of economics
This term refers to the basic requirement for survival, such as food or shelter, while a "want" is something we desire but can live without.
What is a need?
These are the three primary "factors of production" used to create all goods and services
What is land, labor, and capital?
In this type of economic system, decisions are based on customs and beliefs passed down through generations, often found in indigenous or rural communities.
What is a traditional economy?
This graph shows alternative ways a country can use its productive resources.
What are production possibilities curves?
This term describes the examination of the additional benefits of an activity compared to the additional costs.
What is marginal analysis?
This fundamental economic problem occurs because people have unlimited wants but resources are limited.
What is scarcity?
This factor of production includes all natural resources, such as space to shoot a movie or fertile soil for a farm.
What is land?
In this system, also known as a centrally planned economy, the government makes most of the major economic decisions.
What is a command economy?
Any point located directly on the Production Possibilities Frontier represents this state, where all resources are being used to maximize output.
What is efficiency?
This is the mathematical formula used to determine "Marginal Utility."
What is marginal benefic (MB) minus marginal cost (MC)?
Unlike scarcity, which is a permanent condition, this term describes a temporary unavailability of a good, often caused by man-made factors like a pandemic or supply chain issues.
What is a shortage?
This person is the "risk-taker" who decides how to combine the other factors of production to create new goods or businesses.
What is an entrepreneur?
This term describes the concentration of productive efforts on a limited number of activities, which leads to an increase in overall productivity.
What is specialization?
If an economy is producing at a point inside the frontier, it is experiencing this, meaning it is less productive than it could be.
What is underutilization / inefficiency?
In economic terms, a rational person will usually go through with a decision if the marginal utility this.
What is greater than or equal to zero?
This specific type of cost represents the most desirable alternative that a person gives up when making a choice.
What is opportunity cost?
While a camera used to film a movie is physical capital, the "effort" provided by the camera crew and actors falls under this factor of production.
What is labor?
Adam Smith argued that the marketplace is kept functioning by competition and this personal motivation.
What is self-interest?
When an economy experiences growth or an increase in resources for only one good, the PPC graph will display this type of movement.
What is an outward shift / shift to the right?
Companies (or producers) primarily use marginal analysis as a decision-making tool to help them achieve this goal.
What is maximizing profits?
Economics is defined as the study of how people seek to satisfy their needs and wants by doing this.
What is making choices?
This specific type of capital refers to the knowledge, skills, and education a worker gains through experience.
What is human capital?
These are the three "essential questions" every economic system must answer: What to produce, how to produce it, and this.
Who receives them (the goods and services)?
This economic law states that as production shifts from one item to another, more and more resources are necessary to increase production of the second item, causing opportunity costs to rise.
What is the Law of Increasing Costs?
If you eat five chocolate chip cookies, you will likely find that the satisfaction from the fifth cookie is lower than the first; this concept is called...
What is the Law of Decreasing Marginal Utility?