LPCUWC IB Economics HL (Updated Continuously)

Current Test: Assessment 1 (28/10/2026)

Scarcity

The condition where unlimited wants are met with limited resources.

Factors of Production

The resources used to produce goods and services: land, labour, capital, entrepreneurship

Opportunity Cost

The values of the next best alternative forgone when an economic decision is made.

Production Possibility Curve

A model showing the maximum combinations of two goods an economy can produce with given resources and technology, assuming full employment and production efficiency.

Productive Efficiency

Output produced using the fewest possible resources

Circular flow of income

A model showing flows of resources and goods between households and firms and the matching money flows.

Ceteris Paribus

Holding all other factors constant

Marginal utility

The satisfaction gained from consuming one more unit of a good/service.

Price mechanism

A system where the interaction of demand and supply sets prices, which signal and gives incentives to allocate scarce resources.