Social Studies Chapter 4

Front

What is scarcity?

Back

Scarcity is the economic problem of having seemingly unlimited human wants in a world of limited resources. It means that there are not enough resources to satisfy all our needs and wants.

Front

What is an opportunity cost?

Back

Opportunity cost is the value of the next best alternative that is given up when making a choice. It represents the benefits you could have received by taking an alternative action.

Front

What is a command economy?

Back

A command economy is an economic system where the government makes all decisions about the production and distribution of goods and services, including setting prices.

Front

What is a market economy?

Back

A market economy is an economic system where decisions about production and consumption are made by individual producers and consumers based on supply and demand.

Front

What does it mean to have a personal economic choice?

Back

A personal economic choice refers to the decisions individuals make regarding the allocation of their resources, such as money and time, based on their needs and wants.

Front

What is demand in economics?

Back

Demand is the quantity of a product or service that consumers are willing and able to purchase at various prices during a given time period.

Front

What is supply in economics?

Back

Supply is the total amount of a product or service that producers are willing and able to sell at various prices during a given time period.

Front

What happens when demand increases?

Back

When demand increases, consumers are willing to buy more of a product at the same price, which can lead to higher prices if the supply does not increase.

Front

What is the role of prices in a market economy?

Back

Prices in a market economy help to allocate resources by signaling to producers what to supply and to consumers what to buy.

Front

What is the relationship between supply and price?

Back

Generally, as the price of a product increases, the supply of that product also increases, as producers are willing to make more of it to earn higher profits.