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3 Cards in this Set
- Front
- Back
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Relative Scarcity |
Relative scarcity occurs because resources are finite, while our needs and wants are infinite. In other words, resources are scarce relative to demand (compared with absolute scarcity which means that a good is not available at all). |
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Opportunity Cost |
The value of the next-best alternative that is forgone when a decision is made. |
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Consumer Sovereignty |
This is the idea that it is consumers who influence production decisions. Firms will respond to consumer preferences and so produce the goods demanded by consumers. |
