Microeconomics (4.1.1.4) Flashcards
1
Q
Define scarcity
A
When the demand for a good is greater than the supply of the good
2
Q
Scarcity (short definition)
A
Limited resources but unlimited wants
3
Q
Define trade-off
A
The action of choosing the best next alternative option
4
Q
Define opportunity cost
A
The cost of choosing the next best alternative option, for e.g. gain more timber for furniture but that has sacrificed timber being used for production of houses.
5
Q
When is a trade-off carried out?
A
When resources are scarce and the decision to sacrifice one good to increase the production of the other good by one unit is needed.
