1. Economics
    The study of how we allocate our scarce resources to satisfy our unlimited wants.
  2. Economizing Problem
    • 1) Scare resources
    • 2) Unlimited wants
  3. Resources (inputs)
    • Labor (L)
    • Capital (K)
    • Land (N)
  4. Production Possibilities Curve aka Transformation Curve
    Shows the combinations of output that a nation can produce given its resources and technology.
  5. Law of Increasing Costs
    Once all factors of production are at maximum output and efficiency , producing more will cost more than average.
  6. Barter
    Exchange of goods that does not involve the use of money.
  7. Capitalism
    A system based on private property, free enterprise and competition.
  8. Invisible Hand
    By Adam Smith - self interest leased to an increased standard of living in a nation.
  9. Adam Smith
    Author of Wealth of Nations
  10. Market
    Place where buyers and sellers meet, negotiate and exchange.
  11. Law of Demand
    There is a negative (or inverse) relation between price and quantity demanded.
  12. Law of Supply
    There is a positive (or direct) relation between price and quantity supplied.
  13. Equilibrium
Card Set