Fundamentals
The fact that resources are limited, while human wants and needs are unlimited.
What is scarcity?
These are factors that make a person make a decision.
What are incentives?
An economy can see how much of 2 things it can make by creating one of these.
What is a Production-Possibilities Curve?
This is the allocation method used most often in command economies.
What is Authority Allocation?
This is the US system where people are free to own property, run businesses, sell products, and compete with minimal government intervention.
What is the Free Enterprise System?
A school meal phrase meaning that everything has a cost.
What is "There is no such thing as a free lunch"?
To make a decision well, you should do one of these.
What is a Cost-Benefit Analysis?
When an economy is producing as much as it is able, it is said to be this.
What is Efficient?
This is the struggle among sellers to attract buyers.
What is Competition?
These are resources that you cannot replace.
What are Nonrenewable Resources?
The BEST other option a person could make.
What is Opportunity Cost?
These are the things you give up when making a choice.
What are Alternatives/Trade-Offs?
This is the effect that the more of a resources is used to produce a good, the additional output will eventually decrease.
What are Diminishing Returns?
This is a French term meaning "let it be," suggesting governments should not interfere in the economy.
What is Laissez-Faire?
These are the rules to decide who owns something, how they can use it, and how they can sell or share it with others.
What are Property Rights?
This is the satisfaction or happiness that comes from a good or service.
What is Utility?
Satisfaction, fun, happiness, convenience, fame, and respect are examples of this.
What are Nonmonetary Incentives?
This is the effect that the more of a product you produce, the greater the opportunity cost to produce each unit.
What is the Law of Increasing Opportunity Cost?
This is the process a society uses to distribute goods or services. Price, authority, sharing, majority rule, lottery, and contests are examples of these.
What are Allocation Methods?
This is the government policy that allows the government to buy a piece of property from a citizen for a fair market price, to be used for public good.
What is Eminent Domain?
The author of the 1776 book, "The Wealth of Nations."
Who is Adam Smith?
These results are considered and analyzed ONLY after you commit to a decision.
What are Unintended Consequences?
This is the difficulty in using resources across different types of production.
What is the Inflexibility of Inputs?
This is a problem that command economies have - governments use oppressive power to control the people.
What is Tyranny?
This is the sad story that if everyone has access to a resource, it will be depleted in time.
What is the Tragedy of the Commons?