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How does scarcity apply to a consumer's budget?
Consumers have limited income, forcing choices on what to buy.
How does opportunity cost apply to a government's spending decisions?
Choosing to fund one project means forgoing another.
How does scarcity affect production decisions of a firm?
Firms must decide which goods to produce with limited resources.
How does opportunity cost relate to attending college?
Forgone wages from a job are an opportunity cost of college.
How does scarcity influence international trade?
Countries specialize in goods they can produce efficiently due to resource limitations.
How does opportunity cost affect investment decisions?
Investing in one asset means giving up the potential returns from another.
How does scarcity relate to healthcare?
Limited resources force choices about which treatments to provide.
How does opportunity cost relate to leisure time?
Spending time on leisure means giving up the opportunity to work or study.
How does scarcity affect the price of goods?
Limited supply and high demand can drive up prices.
How does opportunity cost impact business expansion decisions?
Expanding into one market means foregoing opportunities in another.
Micro vs. Macro: Focus?
Micro: Individual agents. Macro: Economy as a whole.
Micro vs. Macro: Examples?
Micro: Consumer behavior. Macro: Inflation, unemployment.
Trade-off vs. Opportunity Cost?
Trade-off: All alternatives given up. Opportunity Cost: Next best.
Physical Capital vs Human Capital?
Physical Capital: Tools and machinery. Human Capital: Skills and knowledge.
What is scarcity?
Unlimited wants but limited resources.
What is opportunity cost?
The value of the next best alternative forgone.
Define trade-offs.
The choices you make when giving up one thing to get another.
What is microeconomics?
Focuses on individual economic agents (households, firms).
What is macroeconomics?
Looks at the economy as a whole (economic growth, inflation).
Define 'land' as a factor of production.
Natural resources like water, minerals, and forests.
Define 'labor' as a factor of production.
The effort, skills, and abilities of workers.
Define 'capital' as a factor of production.
Man-made resources (physical) and skills/knowledge (human).
Define 'entrepreneurship' as a factor of production.
Ability to combine resources to create new goods/services.
What is physical capital?
Man-made resources like tools, machinery, and buildings.
What is human capital?
The skills and knowledge of workers.