Scarcity and Choices
What is scarcity?
The condition that results from society not having enough resources to produce all the things people need and want.
What are the four factors of production?
Land, capital, labor, and entrepreneurs.
What does a production possibilities curve show?
All possible combinations of goods and services an economy can produce with fully employed resources.
What is economic growth?
An increase in a nation’s total output of goods and services over time.
What is a product market?
Where goods and services are sold to consumers.
Name one way consumers cope with scarcity.
Making trade-offs, looking for alternatives, or delaying purchases.
Give an example of land as a factor of production (besides trees).
Mineral deposits, farmland, livestock, or climate.
What happens if production is inside the curve?
Resources are underused, and the economy isn’t at maximum potential.
What role does human capital play in productivity?
Investments in skills, education, and knowledge increase efficiency and output.
What is a factor market?
Where resources (land, labor, capital) are bought and sold.
You and your brother want a laptop that’s sold out. Name one option you could take.
Buy a different model, check online, go to another store, or choose the most affordable laptop.
How does capital differ from land?
Capital refers to tools, equipment, and machinery used to produce goods and services.
Moving from one point on the production possibilities curve to another involves what concept? *think of a vocabulary word
Opportunity cost.
How does division of labor improve productivity?
By assigning specific tasks to workers who can perform them most efficiently.
How does the circular flow diagram show economic activity?
It shows how money and resources move between individuals and businesses through product and factor markets.
What is opportunity cost?
The value of the next best alternative given up when making a choice.
Why are entrepreneurs important in an economy?
They take risks, innovate, and bring new products or businesses to the market.
Give an example of opportunity cost in school or personal life.
Choosing to complete homework during Seminar time instead of socializing with friends.
Give an example of specialization in history or business. *or any real life situation
Henry Ford’s assembly line, or workers focusing on tasks they do best.
How can cost-benefit analysis help consumers?
By comparing expected benefits to expected costs to make the best decision.
Give an example of a trade-off in school or personal life.
Spending time on homework instead of hanging out with friends.
Explain how all four factors of production are needed to produce education.
Land = school property; Capital = desks, lab equipment; Labor = teachers and staff; Entrepreneurs = textbook and material creators.
How can the production possibilities frontier illustrate economic growth?
An outward shift shows that more goods and services can be produced in the future.
How does economic interdependence benefit societies?
Countries rely on each other, increasing productivity and promoting peace through trade.
Give an example of how economic models help people understand trade-offs, opportunity costs, or production decisions.
An economic model shows how choices involve trade-offs and opportunity costs; for example, a production possibilities curve shows that if a country wants to produce more cars, it must give up producing some clothing.
OR
if a consumer spends money on a new laptop, they give up the chance to buy a tablet or go to a concert, because the same limited money and time resources are needed for all options.