Unlimited demand for limited resources

What resources do most people have?

Manufacture, suppliers, and sellers

Buyers or users

How do we decide who will get the

limited stuff that we have?

Allocation methods

the natural result of a

producer’s decision to allocate a

resource.

What does competition naturally result in?

having to give up something in order to

get what you want.

a cost that someone else

creates, but you have to pay for.

(Pollution of any kind)

a cost that cannot be retrieved.

(A jumbo Blizzard from Dairy

Queen)

the added cost associated

with doing an additional

thing.

(Getting one more hour of sleep)

the value of the

greatest sacrificed alternative.

(The one thing you’d be doing

now if you weren’t here)

giving up some of one

thing in order to get more of

something else.

the added cost of doing

an additional thing.

the added benefit

from doing an additional thing.

as

units of production are increased, the

marginal cost of doing additional work will

also increase.

as units of production increase, the benefit

derived from additional work will decrease

Place where business is done

All the human resources

All of the “stuff” used in production

Risk Taker

defined as 4%

unemployment or less.

not constancy, but

predictable, stable prices. Makes our

lives easier.

Maximum output for every

unit of input.

Having more and

more.

providing for

those who are unable to earn an income.

to pursue

economic activity of their choice.

move toward more equal life for all.

work reasonably

with other countries to balance world trade

Anything owned by a private individual is

if it is owned by the government it is called

which is not a demand determinant

if there are a lot of close substitutes for a product it will tend to be

if the sale of an item is time-sensitive in other words time is running out it will be

if a product has an elasticity ration greater than 1, it will be

cheap items tend to be

in order to raise revenue, a producer will raise the price on a product if it is

a good whose demand decreases when income increases is a

when a person buys a product for less than they were willing to pay, theyre recieving

a change in price will ONLY effect the