Economics Key Terms: Resources, Scarcity, Opportunity Cost, and Economic Theories

What is another word for utility?

satisfaction

5 types of resources

Labor, Capital, Entrepreneurship, Land, Time

Scarcity

Unlimited wants, limited resources

Scarcity's 3 effects

Need for a rationing device, Need to make choices, competition

Opportunity Cost

whatever must be given up to obtain something else - by going to class for 3 hours u lose out on 3 hours of work

Marginal

additional

Unintended Effect

By increasing min wage, causes workers to be fired, less hires, small businesses go broke

4 ways to max out profit

Increase prices, Reduce expenses, Sell More (combo of 3)

Ceteris Paribus

All other things constant

Theory

Meant to be understood, not believed as truth

Positive Economics

Study of "what is" in economic matters

Normative Economics

Study of "what should be" in economics