Introduction to Economics

These flashcards cover key vocabulary terms and concepts from the lecture on economics.

Scarcity

A situation where what people want is more than what is available.

Microeconomics

The study of small parts, like a single person or company.

Macroeconomics

The study of the whole economy as one big system.

Opportunity Cost

The lost chance to have the next best thing when making a choice.

Market Economy

An economy where decisions are made by the market (demand and supply) to make a profit.

Planned Economy

An economy where the government makes all decisions to focus on social welfare.

Mixed Economy

An economy that incorporates elements of both the government and the market.

Production Possibility Curve (PPC)

A graph that shows the maximum combinations of two goods an economy can produce with its current technology and resources.

Rightward Shift in PPC

Occurs when the curve moves out to the right due to increased resources or improved technology.

Leftward Shift in PPC

Occurs when the curve moves in to the left due to destruction of resources or worsening technology.

Marginal Rate of Transformation (MRT)

The rate at which one good must be sacrificed to produce more of another good, illustrating the trade-off in production.