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12 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Economic Problem |
Firms have to decide what to produce and how to effectively |
Infinite wants but limited resources |
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Economic Good |
Scarce and involve opportunity cost |
Opposite to free good |
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Free Good |
No opportunity cost |
E.g. intellectual ideas |
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PPF |
Shows the maximum possible output combinations of 2 goods/services an economy can achieve when all resources are fully and efficiently employed |
Shows maximum possible output combinations of 2... |
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Scarcity |
Despite wants and needs there are simply not enough resources to meet those needs |
Wants and needs...resources |
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Scarcity PPF |
Back (Definition) |
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Productive Efficiency |
When a firm operates at minimum average cost, producing the maximum possible output from inputs into the production process |
Firm operates at minimum average cost....producing maximum output |
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Allocative Efficiency |
When it is not possible to make someone better off without making someone worse off, or you can’t produce more of one good without making less of another |
Make someone better off... |
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Efficiency PPF |
Back (Definition) |
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Economic Welfare |
Economic well being of an individual, group or economy |
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Opportunity Cost |
Next best forgone alternative |
Alternative |
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Capital Goods |
Human made products used in the production of other goods and services |
E.g. machines |
