SCARCITY & FACTORS OF PRODUCTION
This fundamental economic condition exists because human wants are unlimited, but productive resources are limited.
Scarcity
The most desirable alternative given up as the result of a decision.
Opportunity Cost
The extra cost of adding one more unit of production.
Marginal Cost
The line on a PPC graph that shows the maximum possible output combinations an economy can produce.
Production Possibilities Frontier also accept Production Possibility Curve
Unlike a permanent condition of scarcity, this temporary situation occurs when producers cannot or will not offer goods at current prices, resulting in empty store shelves.
Shortage
An individual who combines land, labor, and capital to create and market new products or services.
Entrepreneur
The classic economic trade-off phrase describing a society's choice between producing military goods or consumer (Domestic) goods.
Guns vs. Butter
The additional satisfaction or advantage gained from consuming or producing one more unit of a good.
Marginal Benefit
Any point located strictly inside (to the left of) the production possibilities frontier indicates this condition in an economy.
Underutilization (Inefficiency)
Public protests demanding to "Save Our Libraries" illustrate the trade-off between receiving government services and paying these.
Taxes
Water, fertile farmland, and crude oil are examples of this category of economic resources.
Land Resource
In a decision-making grid, taking a faster toll road for $4.89 instead of a free route saves time, representing this side of the cost/benefit equation.
Benefit
High initial unit costs during production startup are primarily driven by these initial investments in factory equipment and machinery.
Start-Up Costs (Capital Costs)
When an economy experiences overall GDP expansion or technological advance, its PPF shifts in this direction.
To The Right (Outward)
The concentration of high-technology firms in the San Francisco Bay Area is due to the region possessing resources best suited for these types of goods.
High-Tech (Technology) Goods
The tools, equipment, factories, and machinery used to produce other goods and services.
Physical Capital
Deciding whether to study for one extra hour or sleep for one extra hour is an example of thinking at this location.
At the Margin
A consumer buys multiple pairs of shoes because they believe this economic value exceeds the marginal cost.
Marginal Benefit
In a two-goods model (e.g., shoes and watermelons), producing maximum watermelons results in zero shoe production due to this reality.
Resource Limitation (Scarcity of Resources)
When U.S. domestic oil production increased between 2008 and 2013, this method for receiving oil decreased.
Petroleum (Oil) Imports
The knowledge, skills, education, and training that workers gain through experience or instruction.
Human Capital
According to an opportunity cost chart on college education, the primary trade-off of attending college compared to direct employment is incurring this financial burden.
Student Loan Debt
This economic law explains why going from a B to an A grade requires 3 additional study hours, whereas going from a C to a B requires only 1 extra hour.
Law of Increasing Costs
In a PPC table where Boots drop from 200 to 160 (+50 Shoes) and then to 120 (+30 Shoes), the Law of Increasing Costs dictates the next Boot yield for another 20 shoes will be *less* than this number.
90 (or less than 90, e.g., 80)
CPR training and professional development courses directly increase this category of factor inputs
Human Capital