A
Because resources are limited but human wants are unlimited, society must make choices about how to use its resources.
What is scarcity?
This person buys and uses goods and services to satisfy their wants and needs.
What is a consumer?
Something people would like to have but can live without
What is a want?
Haircuts, Netflix subscriptions, and car repairs are examples of things people pay for that are not physical objects.
What are services?
Forests, water, minerals, farmland, and oil all fall into this factor of production.
What is land/natural resources?
When you choose one option, you give up the value of the next-best option.
What is opportunity cost?
A person or country that can produce everything it needs without relying on others is described this way.
What is self-sufficient?
A factory, computer, machine, or delivery truck used to produce something is an example of this factor.
What is a capital resource?
This measures how much output is produced compared with the amount of resources used to produce it.
What is productivity?
Land, labor, capital, and entrepreneurship are collectively known as these.
What are the 4 factors of production?
Before money became widely used, people often exchanged one good or service directly for another.
What is barter?
This is the satisfaction or happiness a person receives from consuming a good or service.
What is utility?
An economy is producing as much as possible with its available resources when it reaches this condition.
What is efficiency?
Two countries may depend on each other because each specializes in producing certain goods and services.
What is interdependence?
Instead of having every worker make an entire product, workers specialize in specific tasks.
What is division of labor?
A point inside the PPC indicates that an economy is not using all of its resources effectively.
What is underutilization?
An economy must choose between producing more military equipment and producing more consumer goods. This classic economic trade-off is known by this phrase.
What is Guns vs. Butter?
A business compares the advantages it expects to receive with the disadvantages or expenses before making a decision.
What is cost/benefit analysis?
Shows the maximum combinations of two different goods an economy can produce using its available resources and technology.
What is the Production Possibilities Curve?
Every economy must answer: What should be produced, how should it be produced, and who should receive what is produced? These are known as these.
What are the 3 basic economic questions?
A country discovers a huge new supply of oil that can be used to produce goods. What factor of production changed, and which direction does the PPC shift?
Natural resources/land & shifts right
Several major factories lose their machinery in a fire, making it harder for the economy to produce goods. What factor changed, and which direction does the PPC shift?
Capital & shifts left
A country experiences a baby boom. Twenty years later, there are millions of additional workers available to produce goods and services. What factor changed, and which direction does the PPC shift?
Labor & shifts right
A country's supply of usable farmland decreases because rising sea levels flood large areas of farmland. Identify the factor and direction of the shift.
Land/ natural recourses & shifts left
An entrepreneur develops a revolutionary new production method that allows businesses to create more output using the same workers and resources. What factor changed, and which direction does the PPC shift?
Capital & shifts right