| A | B |
|---|
| scarcity | not enough resources to satisfy demand |
| resources | factors of production |
| land | everything found in its natural state |
| labor | human-input to production |
| capital | man-made inputs to production |
| demand | willingness and ability to give up something of value in exchange for something of value |
| production | creation of utility |
| utility | usefulness |
| shortages | temporary |
| Law of Diminishing Utility | the more you have of the same product, the less value each additional product has to you |
| opportunity cost | what you give up when you make a choice |
| production-possibilities curve | shows that the opportunity cost of producing a particular good or service is the good or services given up |
| Law of Demand | price goes up, quantity demanded goes down |
| Law of Supply | price goes up, quantity supplied goes up |
| market-clearing price | quantity demanded equals quantity supplied |
| elasticity | responsiveness of buyer demand to changes in price |
| elastic demand | demand and total revenue will change with changes in price |
| inelastic demand | as price increases, total revenue continues to increase |
