Scarcity & Choice
The condition that exists because wants are unlimited and resources are limited.
What is scarcity
The “next best alternative” you give up when you choose something.
What is the opportunity cost.
Natural resources (water, trees, minerals).
What is Land.
Two main (most basic) groups in the basic circular flow model (providers and users of the factors of production).
What are households and businesses (firms)
The Law of Demand: When price goes up, quantity demanded usually does this.
What is decreases (goes down)
The result of scarcity; you must pick between options.
What is choice
You choose to study instead of playing basketball. The opportunity cost is ______.
What is playing basketball (the next best alternative)
Human effort and skills used to produce.
What is labor
Households sell resources in this market.
What is the factor (resource) market
A movement along the demand curve is caused by a change in ______.
What is price
Anything used to produce goods and services.
What are the factors of production
True/False: Opportunity cost is always money.
What is false
Tools, machines, buildings used to make goods/services.
What is capital
Businesses sell goods and services in this market.
What is the product market
New technology makes production cheaper. Supply shifts this way.
What is the right (or increases)
True/False: If something is scarce, everyone can have as much as they want.
What is false
Giving up one thing to get something else.
What is trade-off
Risk-taking and organizing resources to start a business.
What is an Entrepreneur
Money paid to workers for labor.
What is wages
Name one demand shifter.
What are tastes (preferences), income, population, prices of related goods (complements and substitutes), and expectations?
Because of scarcity, every choice has a ______.
What is a trade-off
If you buy a $5 snack instead of saving, the opportunity cost could be ______.
What is the $5 of savings (or the best option you could have spent that money on.
Classify: “A farmer’s tractor.”
What is capital
In circular flow, businesses receive money (revenue) from households and give households ______.
What are goods and services
Name one supply shifter
What are input costs/Shocks/Natural Disaster, technology, number of sellers, Government (taxes/subsidies), and expectations