Economics 1
This principle says that resources are limited, so choices must be made
What is Scarcity Forces Tradeoffs?
Natural resources like soil, water, and sunlight are considered this factor of production.
What is Land?
This type of economy makes decisions based on customs and traditions.
What is a Traditional Economy?
The list of options you give up when making a decision.
What are Tradeoffs?
Something that motivates a person to act in a certain way.
What is an Incentive?
The idea that people weigh what they give up versus what they gain when making a decision.
What is Costs vs. Benefits?
The human effort and time put into production for pay.
What is Labor?
In this type of economy, the government makes all economic decisions.
What is a Command Economy?
A decision-making tool where you list both positives and negatives.
What is a Cost-Benefit Analysis?
The principle that explains why people specialize and exchange goods.
What is Trade Makes People Better Off?
This term describes what you gain by adding one more unit of something.
What is Marginal Benefit?
The skills, knowledge, and education of workers is called this type of capital.
What is Human Capital?
Adam Smith’s “invisible hand” is associated with this type of economy.
What is a Market Economy?
Spending your paycheck on concert tickets instead of saving for a car demonstrates this principle.
What is Future Consequences Matter?
The “invisible hand” guiding buyers and sellers describes how this works.
What is a Market?
The principle that says today’s decisions can affect tomorrow’s outcomes.
What is Future Consequences Matter?
Tools, machines, and buildings used in production.
What is Physical Capital?
Most modern nations, including the U.S., operate under this blended system.
What is a Mixed Economy?
Giving up sleep to study for an exam is an example of this concept.
What is Opportunity Cost?
Making a chart to compare what you gain and lose from a decision is called this.
What is Cost-Benefit Analysis?
“There Ain’t No Such Thing As A Free Lunch” is an example of this principle.
What is Scarcity Forces Tradeoffs?
The risk-taker who combines land, labor, and capital to create goods or services.
What is an Entrepreneur?
These are the three basic questions every economy must answer.
What are: What to produce? How to produce? Who gets it?
Choosing whether the marginal benefits outweigh the marginal costs is called ____.
What is Thinking at the Margin?
A bulldozer used in construction is an example of which factor of production?
What is Physical Capital?
A software company invests in employee training programs. Is this an example of physical capital, human capital, or both? Explain.
What is human capital, because it increases workers’ skills/knowledge, though it indirectly raises the effectiveness of physical capital too?
$1000: Compare how a command economy and a market economy each answer the question: “Who gets the goods and services?”
In a command economy, government decides; in a market economy, distribution is based on supply, demand, and purchasing power.
A student must choose between a part-time job or an unpaid internship. What is the opportunity cost of each choice?
For the job: losing experience/networking. For the internship: losing wages earned from a job.
A government spends more on defense and less on education. Identify the tradeoff and one potential long-term consequence.
The tradeoff is education funding. Long-term, it may lower workforce skills, hurting future economic growth.
A student spends four years in college instead of working full-time. Identify at least two tradeoffs and one long-term benefit.
What are tradeoffs: lost income, tuition costs; long-term benefit: higher lifetime earnings, better career opportunities.