Microeconomics Flashcards
What is economics?
The study of how to evaluate alternatives and make better choices
What is scarcity?
The demand for a good or service is greater than the availability of the good or service
What is opportunity cost?
What you have to give up to buy what you want
What are the characteristics of a market economy?
Private property, freedom, self-interest, competition, minimum government intervention
What are the three kinds of productive resources?
Natural, human, and capital
What are natural resources?
Materials from the Earth that are used to support life and meet people’s needs
What are capital resources?
All the man-made assets that are used to manufacture goods
What are human resources?
The knowledge, skill, training, and experience that individuals need to produce goods and services within their economy
What is a production possibility curve?
A graph that shows all of the different combinations of output that can be produced given current resources and technology
What is the law of demand?
when the price of a product goes up, the quantity demanded will go down
