| A | B |
|---|
| what are resources that are made by humans and used to create other goods and services called? (1.1) | capital |
| what are the resources used to make all goods and services called? (1.1) | factors of production |
| why are all goods and services scarce? (1.1) | demand is unlimited |
| what is the difference between scarcity and shortage? (1.1) | scarcity=always limited, shortage=sudden limited |
| describe the "guns and butter" trade off (1.2) | National defense vs. domestic needs |
| what is the most desireable alternative given up for a decision called? (1.2) | opportunity cost |
| what is efficiency? (1.3) | using recouces to maximize production |
| what are the three key economic questions? (2.1) | 1.what goods and services should be produced, 2. how should these goods and services be produced, 3. who consumes these goods and services |
| what is the purpose of an economic system? (2.1) | method used to produce and distribute goods and services |
| what is the "law of demand" | consumers buy more of a good when its price decreases and less when its price increase |
