Unit 3 Part 2 Econ 200: Scarcity and Choice

These flashcards cover key vocabulary and concepts related to scarcity, choice, and decision-making in economics.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Indifference Curve

A graph that shows different combinations of two goods that provide the same level of utility to a consumer.

Marginal Rate of Substitution (MRS)

The rate at which a consumer is willing to give up good Y for good X while maintaining the same level of utility.

Marginal Rate of Transformation (MRT)

The rate at which one good must be sacrificed to produce another good.

Feasible Set

The set of all possible combinations of goods that can be produced with available resources.

Utility

A measure of satisfaction or pleasure gained from consuming goods and services.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.

Decision Making Under Scarcity

The process of making choices optimally in a context where resources are limited.

Production Function

A mathematical relationship depicting the output generated by various combinations of inputs.

Optimal Choice

The best possible choice that maximizes utility within given constraints.