Factors of Production
What are the 4 factors of production?
entrepreneurship, land, labor, and capital
How people, their choices, and society use resources to satisfy wants and needs is what?
economics
The general price level of goods and services rises over time, reducing the purchasing power of money describes what?
Inflation
What does the vertical axis of the graph measure?
Price
What happens to prices during the off-season?
They continue to drop.
Mined minerals, crops, and buildings refer to what factor of production?
Land
What is the non-negotiable baseline required for survival?
Needs
Based on an annual inflation rate of 8%, how much purchasing power will be lost from the $1,000 saved inside your lucky piggy bank after one year?
$80
What does the intersection of the supply and demand curves represent?
Market Equilibrium
A luxury watch becomes more expensive, yet its sales increase because wealthy consumers want to display their status. Which conclusion is best supported by the material?
The watch behaves like a Veblen good because its high price signals status
Every allocation of a resource is a rejection of an alternative is called what?
Opportunity Cost
According to the learning material, what is the universal constraint?
We live in a world of limited resources
Which group of people would be most affected by rising inflation?
Retired senior citizens living on fixed incomes
Who is identified as the actor associated with demand?
The consumer
Why might a buyer pay full price for a first car but demand a large discount for a fifth car?
The fifth car is likely to provide less additional value because the buyer already owns several cars. Key term is marginal utility.
A farmer uses a field, workers, and machinery to grow crops. Which factor of production does the field represent?
Land
Which of the following is a possible way individuals can protect themselves from inflation?
Investing in assets that may appreciate over time
Imagine an item you bought would have cost $2.00 back then. What a deal! Does this mean that the item would have been super cheap and affordable for most people in 1950?
No, because money had different value, and $2.00 could have been a significant amount for many people in 1950.
If the price of a product decreases while all other conditions remain the same, what will most likely happen to demand?
Demand will increase.
If a new technology makes producing smartphones cheaper, what will likely happen to the supply curve?
Shift right
A business owner organizes workers, obtains equipment, and decides how to use resources to produce goods. Which factor of production is being demonstrated most directly?
Entrepreneurship
If inflation causes prices to rise but wages stay the same, what happens to purchasing power?
It decreases because you can buy less with the same money
Gerald just received a 2% raise from his employer. However, the rate of inflation last year was 3%. Why is this a problem for Gerald?
His real income decreased because prices rose faster than his wages, reducing his purchasing power.
Why might a buyer pay full price for a first car but demand a large discount for a fifth car?
The fifth car is likely to provide less additional value because the buyer already owns several cars. Key term is marginal utility.
A company finds that customers eagerly buy their first unit but request increasingly larger discounts for later units. Which explanation best uses the evidence in the material?
The additional units provide diminishing marginal utility as customers acquire more of them.