| A | B |
|---|
| Scarcity | Not enough of a product for everyone to have - causes goods to have a price that determines who's willing to pay for it. |
| Price | Value assigned to a product according to its supply and demand. |
| Law of Supply | Idea that suppliers will make more of a product as the price for the product increases. |
| Law of Demand | Idea that buyers will demand more of a product as its price decreases. |
| Market Price | Point where suply curve and demand curve intersect, creating the value of a product. |
| Shortage | Usually temporary situation where demand is greater than supply of a product - price usually increases. |
| Surplus | Situation when supply is greater than demand - price will usually decrease. |
| Diminishing Utility | Idea that a person's demand for a product will reach a maximum no matter what the price. |
| Diminishing Return | Idea that a supplier will reach a point when increased production will not increase profits. |
| Productivity | The amount of work produced in a given time. Increased productivity causes prices to decrease and fights inflation. |
| Comparative Advantage | Situation when one nation produces a product better or cheaper than other nations. |
| Division of Labor | Idea of dividing labor into individual tasks in order to increase productivity. |
| Economies of Scale | Idea that larger businesses can operate at a more efficient rate because of its bulk. Same concept applies when buying items in large quantities. |
| Opportunity Cost | Idea that a person loses a chance to do something when they make a choice. |
| Trade Off | Idea that you deliberately make a decision and do so knowing the other options would be lost. |
| Factors of Production | Land, Labor, Resources, Management |
