Economics: Resources and Opportunity Cost (Video)

Vocabulary flashcards covering scarcity, the four factors of production, opportunity costs, PPC, rational decisions, and marginal concepts.

Scarcity

Resources are limited relative to unlimited wants, forcing individuals and societies to make choices and face trade-offs.

Land (Natural resources)

Natural resources not created by humans, such as wheat, trees, animals, minerals, and sunshine.

Labor

All human effort, skills, and talents used in the production process.

Capital

Man-made resources such as machinery, tools, equipment, factories, and financial assets used to produce goods and services.

Entrepreneurship

Risk-takers who combine land, labor, and capital to create goods/services; often drive innovation (example: Bill Gates).

Four factors of production

Land, Labor, Capital, and Entrepreneurship—the resources used to produce goods and services.

Opportunity cost

The value of the next-best alternative forgone when making a choice.

Production Possibilities Curve (PPC)

A graph showing the maximum feasible combinations of two goods given available resources and technology, illustrating scarcity, trade-offs, and opportunity costs.

Rational decision (in economics)

An economic decision made when marginal benefits outweigh marginal costs.

Marginal benefit

The additional benefit received from consuming or producing one more unit.

Marginal cost

The additional cost incurred from producing one more unit.

Trade-off

A sacrifice or compromise when choosing between options; central to the concept of scarcity and PPC.