Scarcity and Choice
What basic economic problem exists because people have unlimited wants but limited resources
Scarcity
Name the 3 basic factors of production
What are Land, Labor, Capital
What is the satisfaction or benefit gained from consuming a good service called?
What is Production Possibilities Frontier
Is a haircut a good or a service?
A store runs out of the newest game console for 2 weeks.
What is shortage
A bakery buys a new commercial oven. which factor of production is the oven?
What is physical capital
What is the value of the next-best alternative you give up when making a choice?
What is opportunity cost
On a PPF graph, what does a point ON the frontier represent?
Unattainable production with current resources and technology
Classify sunlight: renewable, nonrenewable, or perpetual resource?
What is perpetual resource
A student chooses to work Saturday instead of attending a concert. What concept is this called?
What is a trade off
A chef completes advanced training and becomes more skilled. What type of capital has increased?
What is human capital
What do economists call examining the additional benefit and additional cost of one more unit?
Thinking at the margin
What does a point INSIDE the PPF represent?
Inefficient production or underused resources
A business owner chooses between buying a $2,000 computer and running a $2000 campaign. What makes this an economic decision?
What is limited resources requires choices
You can either earn $60 babysitting or attend a free festival. What is your opportunity cost?
The $60 in earnings you gave up
A student opens a tutoring company, organizes workers, and accepts risk of failure. Which factor of production is demonstrated?
What is entreprenuership
Your first pizza slice is amazing, but the fourth adds very little satisfaction. Name the principle.
What is diminishing marginal utility
What does a point OUTSIDE the current PPF represent?
What is unattainable production with current resources and technology
A farm increases output from 100 to 150 crates with the same labor input. By what percentage did productivity rise?
Why does having more money not eliminate scarcity?
Because time and other resources remain limited
A factory makes 240 shirs using 12 worker-hours. What is its productivity shirts per worker-hour?
What are 20 shirts per worker-hour (240/12)
A game cost $40. You expect $55 of benefit from buying it. Should you buy it based only on comparison, and why?
Yes, the expected benefit exceeds the cost by $15
A major technology improvement allows an economy to make more of both products. What happens to the PPF?
A town can produce 10 bikes and 0 scooters or 0 bikes and 20 scooters. Assuming a straight-line PPF, what is the opportunity cost of 1 bike?