Chapter 1 Flashcards
1
Q
Scarcity
A
Limited quantities of resources to meet unlimited needs
2
Q
Shortage
A
Producers will not or cannot offer goods or services at the current price
3
Q
Physical capital
A
Human made objects used to create other goods or services
4
Q
Trade-offs
A
All the alternatives that we give up whenever we choose one course of action over another
5
Q
Guns or butter
A
And example used by economists. To simplify their explanations of trade-offs two countries.
(Example: guns=military butter=consumer goods)
6
Q
Opportunity cost
A
The most desirable alternative given up as a result of a decision
7
Q
Thinking at the margin
A
From an economist pov
When you decide how much or less to do
