Factors of Production
What is an Input?
Scarce resources that go into making a product.
What happens when output increases but input stays the same?
Productivity increases.
What concept is illustrated by the PPF?
Trade-offs in an economy.
What is opportunity cost?
The value of the next best alternative given up.
What are incentives?
Motives to achieve a desired result.
What is an Output?
The goods or services that are created using inputs.
How is productivity measured in economics?
Productivity = Output รท Input.
How does the PPF typically appear on a graph?
As a bowed-out curve.
Which of the following is NOT a common incentive: Free trials, Customer loyalty programs, Product recalls?
Product recalls.
What is a good?
Physical item created for selling.
What type of resource is oil considered to be?
Nonrenewable resource.
What does it mean when productivity increases?
More goods/services are produced with the same or fewer inputs.
What causes a shift of the entire PPF curve to the right?
Technological advancement.
How do incentives influence consumer behavior?
They encourage consumers to make purchases or act in a specific way.
What is a service?
Actions or activities done for buyers.
What type of resource is sunlight considered to be?
Perpetual resource.
How can technology impact productivity?
Technology can increase productivity by making processes more efficient.
What can cause the PPF curve to shift to the left?
A natural disaster that reduces production capacity.
What is the primary purpose of using incentives in advertising?
To manipulate consumer behavior.
What is Labor?
The effort and time put into production for which someone is paid.
What is Human Capital (250) and what is Physical Capital (250)?
Human capital: the expertise, experience, skill, education, and knowledge of laborers
Physical capital: physical, man-made tools, machines, and resources involved in the production process
What are the 4 main factors of production?
Land, Labor, Capital, and Entrepreneurship.
What does a point outside the PPF curve represent?
Unattainable production with current resources.
How can incentives be used to increase productivity?
Incentives can motivate workers to increase their efficiency or productivity.
What is an Entrepreneur?
The risk taker who combines the factors of production to create goods and services.