Basic Concepts of Microeconomics
Resources - answersInstruments used to create the goods people desire
Scarcity - answersSituation in which the amount of an item available is less than people
want
Choice - answersDecisions made from a set of alternatives
Rational decision - answersA decision that best serves the decision maker's objectives
Opportunity cost - answersForgone value of the next best alternative
Outputs - answersFinished goods and services
Inputs - answersResources used in production
Production possibilities frontier - answersGraph of combinations of goods that can be
produced with available inputs and technology
Allocation of resources - answersDecision on how to divide scare resources
Principle of increasing costs - answersTendency for the opportunity cost of an additional
unit of output to rise as production increases
Consumption of goods - answersItem available for immediate use by households
Capital goods - answersMan-made goods used to produce other goods
Economic growth - answersOutwards shift of the PPF
Resources - answersInstruments used to create the goods people desire
Scarcity - answersSituation in which the amount of an item available is less than people
want
Choice - answersDecisions made from a set of alternatives
Rational decision - answersA decision that best serves the decision maker's objectives
Opportunity cost - answersForgone value of the next best alternative
Outputs - answersFinished goods and services
Inputs - answersResources used in production
Production possibilities frontier - answersGraph of combinations of goods that can be
produced with available inputs and technology
Allocation of resources - answersDecision on how to divide scare resources
Principle of increasing costs - answersTendency for the opportunity cost of an additional
unit of output to rise as production increases
Consumption of goods - answersItem available for immediate use by households
Capital goods - answersMan-made goods used to produce other goods
Economic growth - answersOutwards shift of the PPF
