Scarcity & Choice
The condition that exists because human wants are infinite but resources are limited.
What is Scarcity?
Any point located exactly on the PPC line represents this type of efficiency.
What is Productive Efficiency?
This law states that as price decreases, the quantity demanded increases.
What is the Law of Demand?
This law states that producers will offer more of a good for sale at higher prices
What is the Law of Supply?
The price at which quantity demanded equals quantity supplied.
What is the Equilibrium Price (or Market Clearing Price)?
This term refers to the "true cost" of a decision, representing the value of the next best alternative given up.
What is Opportunity Cost?
This specific shape of the PPC indicates that resources are easily adaptable between the production of two goods
What is a Straight Line (Constant Opportunity Cost)?
When a consumer's income rises and they buy more of a good, that good is classified as this.
When a consumer's income rises and they buy more of a good, that good is classified as this.
An improvement in this "shifter" allows a firm to produce more output with the same amount of inputs.
What is Technology?
If the current market price is above the equilibrium price, this condition occurs.
What is a Surplus?
This factor of production includes the tools, machinery, and factories used to produce goods
What is Physical Capital?
To achieve economic growth and shift the PPC outward, a nation must invest in these two things.
What are Technology and Resources (or Capital Goods)?
If the price of hot dogs rises, the demand for hot dog buns will do this.
What is Decrease (Shift Left)?
If the government provides this type of financial payment to a firm, the supply curve will shift to the right.
What is a Subsidy?
If Demand increases and Supply decreases simultaneously, this variable's change is "indeterminate" without further data.
What is Quantity?
Coffee farm, barista, espresso machine & cafe owner represent these.
What are the Factors of Production
A point outside the PPC is currently described by this term.
What is Unattainable?
This effect explains that as prices rise, consumers feel "poorer" and decrease their overall consumption.
What is the Income Effect?
When the price of a resource (like labor) increases, the supply curve does this.
What is Shifts Left (Decreases)?
In a competitive market, this "invisible" force eventually pushes prices back toward equilibrium.
What is the Price Mechanism (or Market Forces)?
The process of choosing "a little more" or "a little less" of something, often involving the comparison of MB and MC.
What is Thinking at the Margin?
This law explains why the PPC is typically bowed-out (concave) from the origin.
What is the Law of Increasing Opportunity Costs?
A shift in the demand curve is caused by a change in these, whereas a movement along the curve is caused only by price.
What are Determinants (or Shifters)?
This specific term refers to the total amount of a good that all producers are willing and able to sell at a specific price.
What is Quantity Supplied?
When both Demand and Supply increase, this variable is guaranteed to increase.
What is Quantity?