Untitled Flashcards Set

Economics

The study of how individuals and societies allocate their limited resources to satisfy their nearly unlimited wants.

Scarcity

The fundamental economic problem that arises because human wants exceed available resources.

Opportunity Cost

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

Microeconomics

The study of individual decision-making and markets.

Production Possibilities Frontier (PPF)

A graph that illustrates the trade-offs between two goods given limited resources.

Equilibrium Price

The price at which quantity demanded equals quantity supplied.

Labor Market

A marketplace where firms are demanders of labor and households are suppliers of labor.

Interest Rate

The price of borrowing money, usually expressed as a percentage.

Trade-offs

The alternatives that must be given up when making a choice.

Surplus

A situation in which quantity supplied exceeds quantity demanded.