Economic Principles and how the market works

Front

What does scarcity mean?

Back

Scarcity means there are limited resources (like money, time, and materials) but unlimited wants and needs.

Front

What are the factors of production?

Back

Natural Resources, Human Resources (Labor), Capital Goods, Enterprise (Entrepreneurship).

Front

What is opportunity cost?

Back

Opportunity cost is what you give up when you choose one option over another.

Front

What are the basic economic questions?

Back

What to produce?, How to produce?, For whom to produce?

Front

What are economic models?

Back

Simple diagrams or charts that help explain how the economy works.

Front

What is a market economy?

Back

An economy where prices and production depend on what people want and how much they are willing to pay.

Front

What is a command economy?

Back

An economy where the government decides what is made, how it is made, and who gets it.

Front

What does the Production Possibility Curve (PPC) show?

Back

The PPC is a graph that shows the different amounts of two goods that can be produced with the resources available.

Front

What is the Law of Demand?

Back

When the price of a good goes up, the quantity demanded goes down, and when the price goes down, the quantity demanded goes up.

Front

What is the demand curve?

Back

A graph that shows the relationship between the price of a good and the quantity demanded.