About This Chapter
Scarcity, Costs & Production in Economics - Chapter Summary
The purpose of the lesson videos in this chapter is to teach you the concepts of scarcity, opportunity cost, efficiency and margins, as well as how they are used to answer the three basic questions of economics: what to produce, how to produce it and who is it for? The specifics you will learn in this chapter include:
- Defining economics using the concept of scarcity
- Presence of opportunity cost in decisions
- The concept of efficiency and the production of goods
- Factors that cause shifts in the production possibilities curve
- How traditional, market, command and mixed economies answer the three basic questions of economics
- Using margins when making economic decisions
If you have any questions on any of the topics in this chapter, ask our instructors for assistance. Also, complete lesson worksheets and take lesson quizzes to fortify the information you have learned and find out what material you have not fully mastered. Review areas of weakness using video tags that will take you to the main topics in the video lessons.
1. Economic Scarcity and the Function of Choice
Discover the foundation of the social science of economics as we explore the basic economic problem of scarce resources and unlimited wants using key definitions that create a framework for understanding everyday behavior in a nation.
2. Opportunity Cost: Definition & Real World Examples
Learn the most important concept of economics through the use of real-world scenarios that highlight both the benefits and the costs of decisions. Opportunity cost is a simple yet powerful principle that reveals how to make the best economic decisions possible, and it explains why people make the choices they do.
3. How to Calculate Opportunity Cost
Learn the formula that reveals the economic value in any major choice between two possibilities. Every choice involves tradeoffs, and opportunity cost shows you how to measure these tradeoffs.
4. Applying the Production Possibilities Model
Producers in the economy use a visual model, called the production possibilities curve, to make the most efficient production decisions and maximize output. Learn how this model reveals the tradeoffs of every production decision with the simplified example of an economy that produces only two goods.
5. Shifts in the Production Possibilities Curve
In this lesson you will learn how changes inside an economy lead to changes in the production possibilities of a nation. See how different scenarios from everyday life lead to shifts in the production possibilities curve.
6. Production in Traditional, Market, Command & Mixed Economic Systems
This lesson discusses how market, traditional, mixed, and command economic systems operate. The key features, benefits, and drawbacks of each are summarized. Learn how the economic systems answer the three basic economic questions that face all economies.
7. Marginal Analysis in Economics
This lesson explains the economic concept of marginal analysis, which is used in economics to help producers and consumers make economic decisions. Variables, scarcity, marginal benefit and cost, and profit maximization are explained.
8. Law of Increasing Opportunity Cost: Definition & Concept
In this lesson, you will be introduced to the law of increasing opportunity costs. An example is also provided as we walk through the explanation of the law to provide more clarity.
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Other chapters within the AEPA Economics (AZ035): Practice & Study Guide course
- Economic Concepts & Terms
- Basics of Measuring the Economy
- Scarce Economic Resource Markets Basics
- Supply, Demand & Market Equilibrium
- Price Determination & Elasticity
- Business Interactions with the Marketplace
- Producers & Production in Microeconomics
- Economic Market Structures
- Fiscal & Monetary Policies in Economics
- Contractionary & Expansionary Gaps
- Economic Governance
- Understanding Macroeconomic Equilibrium
- Inflation & Adjustment in Economics
- Unemployment Basics
- Understanding Inflation & Unemployment
- Overview of Aggregate Demand & Supply
- Understanding Economic Growth and Productivity
- Understanding Comparative Advantage, Specialization & Exchange
- Money & the Market
- The Central Bank & Monetary Policy
- Foreign Exchange & Trade Balance
- Overview of Inflows, Outflows & Restrictions
- Strategies for Economic Analysis
- Consumer Behavior & Microeconomics
- Consumer Buyer Behavior
- Promotion & Public Relations in Marketing
- Consumer Protection Laws & Agencies
- AEPA Economics Flashcards