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14 Cards in this Set

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Scarcity
The situation in which unlimited wants exceed the limited resources available to fulfill those wants.
Production Possibilities Frontier
A curve showing the maximum attainable combinations of two products that may be produced with available resources.
Opportunity Cost
The highest valued alternative that must be given up to engage in an activity.
Economic Growth
The ability of the economy to produce increasing quantities of goods and services.
Trade
The act of buying or selling.
Absolute Advantage
The ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources.
Comparative Advantage
The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than other producers.
Market
A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade.
Product Markets
Markets for goods—such as computers—and services—such as medical treatment.
Factor Markets
Markets for the factors of production, such as labor, capital, natural resources, and entrepreneurial ability.
Circular-Flow Diagram
A model that illustrates how participants in markets are linked.
Free Market
A market with few government restrictions on how a good or service can be produced or sold, or on how a factor of production can be employed.
Entrepreneur
Someone who operates a business, bringing together the factors of production—labor, capital, and natural resources—to produce goods and services.
Property Rights
The rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it.