Economics Key Terms

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Scarcity

Back

Limited resources compared to unlimited wants and needs.

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Opportunity Cost

Back

The value of the next best alternative that is given up when a decision is made.

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Comparative Advantage

Back

The ability to produce a good at a lower opportunity cost than others.

Front

Production Possibilities Curve (PPC)

Back

A graph showing maximum possible production combinations of two goods with available resources.

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Command Economy

Back

An economic system where the government makes all decisions and controls resources.

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Market Economy

Back

An economy where individuals make decisions and own resources with little government interference.

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Traditional Economy

Back

An economic system based on customs, traditions, and beliefs.

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Mixed Economy

Back

An economy combining elements of both market and command systems.

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Supply

Back

The quantity of a product that producers are willing to sell at various prices.

Front

Demand

Back

The quantity of a product that consumers are willing to buy at various prices.