Scarcity & Opportunity cost
What does scarcity mean ?
Limited resources , unlimited wants
What's a traditional economies?
where goods and services are exchanged primarily through bartering rather than monetary transactions.
Define market failure
is a situation where the free market fails to allocate resources efficiently, resulting in a net loss of social welfare
the consumer's desire, willingness, and ability to purchase a specific quantity of a good or service at various prices over a given time
Define Equilibrium
a stable state where opposing forces, like supply and demand, balance out
What does opportunity cost mean?
next best alternative you give up
What's a command economies?
which production, investment, prices, and incomes are determined centrally by a government.
Identify 2 examples of externalities
pollution =negative , education= positive
Define Supply
is the quantity of a good or service producers are willing and able to offer for sale at various prices over a specific time
Identify surplus & shortage
A surplus is when there's too much supply (more available than demanded), pushing prices down, while a shortage is when demand exceeds supply (not enough available)
Identify 3 Factors of production
Land-natural resources, Capital Tools, Machinery
What's a market economies?
driven by supply and demand, where individuals and private businesses make most economic decisions, owning resources and setting prices through competition, with limited government interference.
Define public goods
Government provides ( roads, defense, etc)
Explain Law of Demand
as the price of a good or service increases, the quantity demanded by consumers decreases, and as the price decreases, the quantity demanded increases
Define Consumer surplus/ Producer surplus
Consumer surplus is the extra benefit consumers get from paying less for a product than they were willing to, while producer surplus is the extra profit producers earn by selling for more than the minimum price they'd accept
Identify trade-offs
the necessity of choosing one option over another because resources are scarce
What's a mixed economics?
blends elements of both capitalism (market economy) and socialism (command economy)
what is the role of government protection in economics?
Protect Consumers, Stop Monpolies
Explain Law Of Supply
price of a good or service rises, the quantity supplied by producers increases, and as the price falls, the quantity supplied decreases
How are Consumer/Producer surplus calculated?