Scarcity
Choices
Factors of Production
Capital
Wild Card (wager points)
100
Answer: Multiple productive uses for a single good or service.
What is the "second" definition of scarcity
100
What do we call the possible choices in an economic decision?
Alternatives
100
What are the three Factors of Production?
Land, labor, capital
100
What are the three types of capital?
Financial, physical, and human capital.
100
Define economics
Teacher Discretion
200
How is water in California scarce?
Water is used in multiple productive ways (drinking, bathing, agriculture, sewage...) AND is not abundant enough to meet the needs and wants of Californians.
200
What is Opportunity Cost?
The most valuable alternative NOT chosen.
200
Which of the following are NOT "land" resources for a Banana Stand: Bananas Lumber to make the stand Customers The lot
Customers are not land resources because land resources must be harvested as natural resources or comprise a physical area.
200
How can one develop "human capital"?
Human capital is the net experiences and education that someone needs to produce something. Gaining a diploma, a college degree, or work experience help people become more productive.
200
How can physical capital become financial capital?
Step 1: Sell the physical capital for money. Step 2: Invest money in productive business.
300
The United States produces more corn than anyone in the world. We have so much corn that we cannot possibly consume it all and, sometimes, it spoils in storage. Is corn scarce in the United States?
Water is scarce because we use it in multiple productive ways (food, fuel, export).
300
What analytical tool do economists use to determine the best choice?
Cost-benefit analysis
300
Which of the following does NOT qualify as labor for a Banana Stand? Guatemalan farmers who grow bananas The owner of the banana stand The truck driver who ships bananas to the banana stand The Customers
Neither the customers nor the owner qualify as labor resources because their work-effort does not contribute to the production of the banana products. If the owner worked at the banana stand, he would be productive labor for as long as he worked.
300
What kind of capital do we call the money an entrepreneur uses to pay the workers?
Financial capital.
300
Which factor of production is the most important? Why?
Teacher discretion
400
Question: How does scarcity relate to Economics?
Economics studies the way to allocate resources to overcome the problem of scarcity.
400
You are the owner of a small cafe. Your business is earning you $2000 every week. An executive from Starbucks offers to buy your business and convert it to a Starbucks. He will pay you $100,000 for 100% ownership of the business. What are two alternatives to selling your business?
Possible alternatives: Don't sell Re-negotiate a better deal Sell to someone else
400
Which of the following does NOT qualify as capital for a Banana Stand? The loan used to buy the lot for the banana stand Customers The cashier's knowledge of arithmetic they use to make change. The freezer that keeps the chocolate dipped bananas cool.
The customers are not a capital resource because they are not an resource that can be owned, developed, or invested towards the production of a particular good or service.
400
Give an example of a kind of physical capital would I need to run a successful landscaping business?
Possible answers: Lawn mower, leaf blower, weed-whacker, truck, shears, etc...
400
Please do a cost benefit analysis by instructing Mr. Collins to write on the board in 1 minute. You must name 2 alternatives with a cost and benefit for each: You own a small local cafe with your best friend. Business is booming and you're pulling in $4,000 every week in profits. Your best friend/business partner says you should expand the business to make more money. What do you do?
See board, teacher discretion.
500
Scarcity necessitates what?
Choices
500
You are the owner of a small cafe. Your business is earning you $2000 every week. An executive from Starbucks offers to buy your business and convert it to a Starbucks. He will pay you $100,000 for 100% ownership of the business. Identify a Cost and a Benefit for accepting the offer.
Benefit: $100,000. Ability to reinvest in another business. Cost: $104,000 (in one year)
500
What happens when a company/individual lacks sufficient labor?
Production of the good/service drops.
500
How is finance capital distinct from profit in an economic sense?
Profits are whatever an owner makes in the production of a good. Profits can become finance capital IF the profit gained from a good is "reinvested" (e.g. purchasing more machines for production, paying workers more to get better qualified labor, expanding the size of the facility).
500
You have recently graduated university with a Master's degree in History. You have decided to become a teacher and enroll in a teacher-education program for one more year. The cost of the program is $13,000 and you will make about $27,000 after taxes in your first year of teaching. What is your opportunity cost for deciding to become a teacher?
Teacher discretion.
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