Section 1 Exam Preparation Guide - Key Concepts (Fill-in-the-Blank)

Fill-in-the-blank flashcards covering essential concepts and definitions from Page 1 notes.

Scarcity is the condition that exists when __ are insufficient to meet all wants.

resources

The factors of production include land, labor, capital, and __.

entrepreneurship

A trade-off involves giving up one thing to gain another, representing the concept of __.

opportunity cost

An outward shift of the __ curves indicates economic growth.

OPPF curves

Economic growth is represented by an outward __ of the production possibilities frontier.

shift

Economic growth is demonstrated by an __ in output.

increase in output

With constant trade-offs, the opportunity cost remains __ as production changes.

constant

The idea that the opportunity cost of producing one more unit of a good rises as more of that good is produced is called __.

Increasing marginal opportunity cost

The basis for trade is __, which occurs when a country can produce a good at a lower __ cost than another.

comparative advantage

A country has __ advantage if it can produce more of a good with the same resources.

absolute

In economic analysis, the assumption that all other things are held constant is called __.

Ceteris paribus

Capitalism vs. Socialism deals with how the __ of production are allocated in an economy.

factors of production

Allocative efficiency is achieved when equals .

marginal cost; marginal benefit

Define scarcity.

Scarcity is the condition that exists when resources are insufficient to meet all wants.

The factors of production include land, labor, capital, and __.

entrepreneurship

A trade-off involves giving up one thing to gain another, representing the concept of __.

opportunity cost

An outward shift of the __ curves indicates economic growth.

OPPF curves

Economic growth is represented by an outward __ of the production possibilities frontier.

shift

Economic growth is demonstrated by an __ in output.

increase in output

With constant trade-offs, the opportunity cost remains __ as production changes.

constant

What is the law of increasing marginal opportunity cost?

It's the idea that the opportunity cost of producing one more unit of a good rises as more of that good is produced.

What is the basis for trade, and what is comparative advantage?

The basis for trade is comparative advantage, which occurs when a country can produce a good at a lower opportunity cost than another.

When does a country have an absolute advantage?

A country has absolute advantage if it can produce more of a good with the same resources.

What does 'Ceteris paribus' mean in economic analysis?

It is the assumption that all other things are held constant.

Capitalism vs. Socialism deals with how the __ of production are allocated in an economy.

factors of production

What condition must be met for allocative efficiency?

Allocative efficiency is achieved when marginal cost equals marginal benefit.