Intro to Economics: Scarcity, Costs, and Production Concepts

Question-and-answer flashcards covering core economic concepts from scarcity to production possibilities and basic macro/micro distinctions.

What is scarcity in economics?

Limited resources and unlimited wants.

What is opportunity cost?

The amount of other products that must be sacrificed to produce one more unit of a good.

What is marginal analysis?

The process of comparing marginal benefits and marginal costs to guide decision making.

What is marginal cost?

The cost of purchasing one more unit of a good.

What is marginal benefit?

The extra utility derived from consuming one more unit of a good.

What is utility?

Satisfaction or happiness from consuming a good or service.

What does 'self-interested, but unselfish acts' mean in economics?

Individuals seek to maximize their own utility, and acts of giving can also increase the giver's satisfaction.

If you consume a good without paying for it, who bears the cost?

Someone else bears the cost; for example, platforms monetize services through advertisers.

What is a budget line?

A graph showing the different combinations of two goods a consumer can buy with given income.

What does a budget line illustrate about trade-offs and opportunity cost?

Moving along the line requires sacrificing some of one good to obtain more of the other; the forgone amount is the opportunity cost.

What are the basic factors of production?

Land, Labor, and Capital.

What is land in economics?

Natural resources and land used in production.

What is labor?

Physical or mental work used to produce goods.

What is capital?

Anything that facilitates production (factories, machines, distribution centers). Investment increases future production; money by itself doesn't produce.

What is entrepreneurship?

Individuals who combine land, labor, and capital in new ways to produce goods and services.

What is the Production Possibilities Frontier (PPF)?

A model showing the trade-off between two goods given fixed resources and technology.

What is macroeconomics?

The study of the entire economy, focusing on aggregate measures like unemployment and inflation.

What is positive economics?

Focuses on finding scientific principles and causal relationships about how the economy actually works.

What is normative economics?

Involves value judgments about how the economy should work.

What is the economizing problem?

We want more goods and experiences than are feasible; scarcity forces us to make choices.