Economics Basics
This social science studies the production, distribution, and consumption of goods and services
What is Economics?
This economic concept exists because people have unlimited wants but limited resources.
What is scarcity?
This financial plan estimates income and expenses over a specific period.
What is a budget?
This type of investment represents an ownership share in a company.
What is a stock?
Giving up one thing in exchange for another is known as this.
What is a trade-off?
Food, water, and shelter belong in this category because they are required for human survival.
What are needs?
When the quantity demanded of a product exceeds the quantity supplied at the market price, this occurs.
What is a shortage?
This three-digit number helps lenders evaluate how likely someone is to repay borrowed money.
What is a credit score?
This is the price a person pays for an insurance policy.
What is an insurance premium?
This represents the potential benefit missed when choosing one alternative over another.
What is opportunity cost?
Something a person desires but does not necessarily need to survive is called this.
What is a want?
This condition tends to be ongoing or systemic because resources are limited, while the other condition is often temporary.
What is scarcity?
Explain how creating a budget and maintaining a good credit score can help someone make responsible financial decisions and achieve future financial goals.
What are healthy financial habits? A budget helps someone manage income and expenses, while a good credit score can help them qualify for loans and better interest rates.
This is the amount a person pays out of pocket before insurance covers the remaining eligible costs.
What is a deductible?
Machinery, tools, and buildings used to produce goods and services are examples of this factor.
What is capital?
This describes the overall stability of a person's or household's financial situation and ability to meet obligations.
What is financial health?
A store runs out of a popular toy because more customers want to buy it than the store has available. What is this called?
What is a shortage?
This is the charge for borrowing money, usually expressed as a percentage of the principal.
What is interest?
This document contains the agreement between an insurance company and the person it insures.
What is an insurance policy?
A store offers a discount to encourage customers to buy more products. The discount is an example of this.
What is an incentive?
A student has limited money and must decide how to divide it between school supplies, food, and entertainment. This economic process involves assigning limited resources to different uses.
What is resource allocation?
Explain the difference between scarcity and a shortage using an example of each.
Scarcity is the general condition of limited resources; a shortage occurs when quantity demanded exceeds quantity supplied at the market price.
Two people apply for the same loan. One has a higher credit score than the other. Who is generally more likely to qualify for better interest rates, and why?
The person with the higher credit score, because it generally indicates a stronger history of repaying debt.
Explain how budgeting, having insurance, and investing can each contribute to a person's overall financial health and help them prepare for the future.
What are healthy financial decisions? Budgeting helps manage income and expenses, insurance helps protect against unexpected costs, and investing can help grow money over time and build future financial security.
What are the factors of production? Land, labor, capital, and entrepreneurship.