Intro Economics
What is the difference between a need and a want? Provide one example of each.
Need = required for survival (e.g., food); Want = desired but not necessary (e.g., video game).
Name the three basic types of economic resources (also called factors of production).
land, labor, capital
What does "opportunity cost" mean in simple terms?
Opportunity cost = value of the next-best alternative given up.
What does the Law of Demand state?
Law of demand: as price falls, quantity demanded rises (ceteris paribus)
Name two common types of business organizations (legal/business structure) and give one simple advantage of each.
sole proprietorship (easy start), corporation (limited liability).
Define a good and a service, and give one classroom-appropriate example of each
Good = tangible product (e.g., textbook); Service = activity performed for others (e.g., tutoring).
Provide a short definition for each of the three economic resources and give a one-sentence example of each.
Land = natural resources (e.g., timber);
Labor = human effort (e.g., baker);
Capital = tools/machines/money (e.g., oven).
Give an example of an opportunity cost a student faces when choosing to study for a test instead of attending a part-time job shift.
Opportunity cost = wages lost from job shift; benefit = higher test score/grade.
What typically happens to the demand for winter coats when the price of winter coats decreases? Explain using the law of demand.
Demand increases (more people buy) when price decreases.
What is a sole proprietorship? List one advantage and one disadvantage
Sole proprietorship = business owned by one person. Advantage: simple control/decision-making; Disadvantage: unlimited personal liability.
Explain why clean water is considered both a good and a necessity. Would it be classified as a need or a want? Explain briefly.
Clean water is a good (tangible) and a need (essential for life)
Explain how entrepreneurship differs from the other economic resources and why it is important for new businesses.
Factors: expected return, cost, customer demand, stage of business, risk, cash flow.
A small business owner must choose between expanding the product line or investing in marketing. Describe two factors they should consider when making this economic choice.
Factors: expected return, cost, customer demand, stage of business, risk, cash flow.
Explain how both supply and demand would be affected if a sudden new technology made producing notebooks much cheaper.
Supply increases due to lower production costs → supply curve shifts right; demand might increase due to lower consumer prices; equilibrium price falls, quantity rises.
Compare and contrast a partnership and a corporation in two short bullets (one similarity, one key difference).
Similarity: both involve shared business activity; Difference: partnerships often have shared liability while corporations offer limited liability and are separate legal entities.
A smartphone can be considered a good that fulfills some wants and some needs. Describe two ways a smartphone can be considered a need and two ways it is a want for different people.
Need examples: communication in emergency, access to school resources; Want examples: latest model for status, gaming. (Accept reasonable student answers.)
A bakery needs an oven, flour, a baker, and a business plan. Match each item to the correct economic resource category and briefly justify your choices.
Oven = capital; flour = land (natural resource/input); baker = labor; business plan = entrepreneurship.
Explain how scarcity forces individuals and societies to make choices. Include a brief example at the community level.
Scarcity forces trade-offs; example: city must choose limited park space for housing or recreation.
A popular video game console is released in limited quantities and sells out immediately. Explain using supply and demand why the price might rise on the resale market.
Low supply + high demand → higher resale prices; scarcity increases willingness to pay.
Explain why limited liability is an important feature for many business owners and indicate which business structure commonly offers it.
Limited liability protects owners' personal assets from business debts; commonly offered by corporations (and LLCs).
Describe a scenario where a single product moves from being primarily a want to being a need for most consumers. Explain the economic or social changes that could cause this shift.
Internet/phone service moving to need due to remote schooling; causes: technology integration, social norms.
Consider a community that wants to start an eco-friendly park business. Identify at least two potential shortages in economic resources that could limit the project and propose one creative solution for each shortage.
Shortages: skilled labor, startup capital, suitable land; Solutions: training programs, crowdfunding/loans/grants, leasing/shared space.
The local government has a limited budget and must choose between building a new library or improving public transportation. List three criteria they should use to decide, and explain how opportunity cost should influence the final decision.
Criteria: cost, public benefit, long-term impact; opportunity cost: value of the project not chosen should be compared in decision.
Draw a short scenario where both supply and demand change at the same time (for example: new health concerns increase demand for a product while production costs rise). Explain how the equilibrium price and quantity would likely be affected
If demand increases and supply decreases, price likely rises; quantity change depends on magnitudes (could rise, fall, or stay similar).
A group of entrepreneurs wants to open a cafe with many investors and hopes to attract major funding later. Recommend the best business organization type for their goals, justify your recommendation, and describe one major legal or financial step they must take to establish it.
Recommendation: corporation or LLC (to allow many investors and attract funding); steps: file articles of incorporation/organizing documents, register with state, set up governance, issue shares or membership interests.