Economic Concepts 1
The study of how individuals and societies satisfy their unlimited wants with limited resources
Economics
What is the difference between a need and a want?
A need is essential for survival; a want is something a person desires but can live without.
What does a production possibilities curve illustrate?
The maximum combinations of two goods an economy can produce using its available resources and technology.
The value of the next-best alternative given up when making a choice.
opportunity cost?
Which country gifted the Statue of Liberty to the United States?
France
Are things that are necessary for survival
Needs
What is the fundamental economic problem caused by unlimited wants and limited resources?
Scarcity
If a point falls inside the PPC, what does that tell us about the economy's use of resources?
Resources are being used inefficiently or some resources are unemployed.
Methods used to encourage people to take certain actions
Incentives
What is the only number that has the same number of letters as its value when written in English?
Four
Desires that can be satisfied by consuming a good or service
Wants
What are the four factors of production?
Land, Labor, Capital, and Entrepreneurship
What does a point outside the PPC represent?
A production combination that is currently unattainable with available resources and technology.
You have $20. You can buy a video game or go out to eat. You choose the video game. What is your opportunity cost?
the $20 dollars you could have spent going out to eat
What is the largest island in the world that is not considered a continent?
Greenland
Explain TINSTAAFL
There is no such thing as a free lunch, everything has some type of cost associated with it.
What is the choice being given up when making a decision?
Trade off
If an economy develops better technology that improves production, what can happen to its PPC?
The PPC can shift outward.
The benefit or satisfaction received from using a good or service
Ultility
What is the only country that borders both the Atlantic and Indian Oceans?
South Africa
What are the 3 basic economic question
What, how, Who
Why must individuals, businesses, and governments make economic choices?
Because resources are limited while wants are unlimited.
PPF stands for
production possibilites frontier
To make decisions according to the best combination of costs and benefits
Economize
What is the largest artery in the human body?
Aorta