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7 Cards in this Set
- Front
- Back
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Scarcity. |
Limited resources relative to wants and needs. |
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Resources |
Land, labor, machinery, and other outputs used to produce goods and services. Natural resources Capital goods Human capital |
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Production Possibilities Frontier |
A graph showing alternate combinations of the maximum amounts of two different goods. produced during any particular period of time. Efficiently and fully employed. Explains scarcity and the need for choices. |
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Assumptions, production possibility curve |
All available resources are used. Quantity and quality of available resources are unchanging. Knowledge and technology are also unchanging. We can produce only two goods with our available resources and technology. |
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Opportunity cost |
The best alternative forgone. In order to produce something, something has to be sacrifice. Unemployment of resources are not fully used in production. |
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Economic growth |
A sustained increase in production. Represented by an outward shift of the production possibilities curve: technology developed, quality/quantity of society's resources increases. Produce more output with our available resources. |
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Demand curve |
Downward sloping and reflects the law of demand. |
