one word
essential costs required for maintaining a basic standard of living or meeting a specific goal.
needs
what is Opportunity cost?
value of one’s next best alternative given up when a choice is made
What is an example of Rational Decisioning.
a situation where you (or someone) gains more than they lose/pay.
when does Voluntary Exchange occur?
when two economic actors willingly trade one item for another because it is mutually beneficial
Name the four Economic Systems
Traditional, Command, Market, Mixed
allocates goods, services, and resources through random selection
Lottery
What are Resources?
all the materials available in our environment which are technologically accessible, economically feasible and culturally sustainable and help us to satisfy our needs and wants.
give an example of when someone Allocate's
gives an example of someone assigning or distributing something for a specific purpose or to a particular person/group.
when does Majority rule occur?
when a group of people vote or seek consensus to decide how a good, service, or factor of production will be distributed
list the four types of Factors of Production.
Land, Labor, capital, entrepreneurship
motivates individuals, businesses, and/or governments to undertake an action or avoid an action
Incentive
what is a Free Enterprise System?
A system where private business have freedom to operate with little regulation by the government.
what's an example of Public good?
anything that is available to everyone and one person's use doesn't diminish another's. *Ex: national defense, clean air, knowledge, and infrastructure like roads and public parks.*
when does Efficiency occur?
when factors of production are allocated to their most productive use
indirect cost or indirect benefit to an uninvolved third party that arises as an effect of another party's activity.
Externalities
what is a Production Possibility Curve?
a graph that illustrates the maximum possible combinations of two goods or services an economy can produce given its available resources and technology
give an example of Regulations
rules placed on the production of goods and services by government agencies. *Ex: FDA's food safety standards and the FTC's truth-in-advertising rules.*
when does inefficiency/underutilization occur?
when resources are not being used to their full potential, resulting in lost productivity, increased costs, and missed opportunities.
basic condition that exists when unlimited wants by society exceed limited productive resources.
Scarcity
what is an investment?
an asset or item purchased with the expectation that it will increase in value or generate income over time.
give an example of Marginal Analysis.
when a business increases production of a product because the marginal benefit will be greater than the marginal cost of the increase.
when does productivity occur?
when more output (goods, services, or results) is produced per unit of input (labor, time, capital) than before