Economics Flashcard on Key Concepts

Front

What is the fundamental economic problem?

Back

Scarcity of resources

Front

Why does scarcity arise?

Back

Resources are finite, and wants are infinite.

Front

Opportunity cost is best defined as:

Back

The value of the next best alternative foregone.

Front

Opportunity cost of studying instead of going to a party.

Back

The enjoyment missed at the party.

Front

Which of the following is not a factor of production? Land, Labour, Capital, Money

Back

Money

Front

A point inside the PPC indicates:

Back

Underutilization of resources.

Front

What causes a PPC to shift outward?

Back

Economic growth or technological improvement.

Front

Why is the PPC bowed outwards?

Back

Opportunity cost increases as resources are specialized.

Front

At a point on the PPC, an economy:

Back

Cannot produce more of one good without producing less of another.

Front

What does a movement along the PPC indicate?

Back

A reallocation of resources between two goods.