Whole Class
Defined as unlimited wants but with limited resources
Scarcity
Name the 4 factors of production
Land, Labor, Capital, Entrepreneurship
Economics is the study of making what?
Choices
If someone has a high school diploma but knows if they get a Bachelor's Degree in Engineering, they know they can make more money. Having this engineering knowledge is an example of what kind of capital?
Human Capital
Define Macroeconomics
Study of the large economy as a whole or economic aggregates.
The most desirable alternative given up when you make a choice is called the what?
Opportunity Cost
This covers the small economic units such as individuals, firms, and markets.
Microeconomics
Explicit
What classifies a decision to be rational in nature?
When the marginal benefits are more than the marginal cost
The word marginal = what?
additional
This is a method used by a society to produce and distribute goods and services.
Economic System
When people have the ability to make choices and promote competition between businesses', what kind of economic system is this?
Free Market Capitalism
Why are countries like the USA and UK operating with a mixed economy, even though it's capitalist?
The government regulates some of the means of production for the sake of promoting health and safety for the public/it's citizens
Ex. Limit pollution with car exhaust standards
When individuals seek their own self-interest which promotes competition in the marketplace naturally, what is this concept called?
The invisible hand
What are anti-trust laws?
Laws that stop monopolies, promote competition
Contrast the private vs. public sector
Private = not government-owned companies
Public = controlled by the government
This defines individuals who receive benefits of something without paying
Free Riders
Economic Growth
This is a model that shows alternative ways that an economy can use it's scare resources
The production possibilities curve (or frontier)
The Law of Increasing Opportunity Cost
This is a measure of production that shows the number of outputs per unit of input.
Productivity
Tell me at least 2 things that can help produce more future output?
•Investment in physical capital like equipment, machines, tools, and factories
•Investment in public goods like schools and roads. This is called infrastructure.
•Investment in research and development (R&D)
•Technological improvements that promote innovation
•Investment in human capital like education, job training, and healthcare
•Rule and laws that promote stability
Why do businesses and countries want to improve their productivity?
Since all resources are scarce, improving productivity allows us to produce more stuff with fewer resources.
How can the production possibilities curve shift outward?
Increase in technology and or resources
If country A is operating inside the production possibilities curve line, what is this considered?
Inefficent