Factors of Production
Define "Capital"
Human made resources used to produce other goods and services
Define "Demand" and "Supply" (label each)
Demand: How much of something people want
Supply: How much of something is available
Define "economics"
The study of population, exchange, and consumption of resources
Define "Opportunity Cost"
The benefit that you give up when you use resources for one purpose instead of another
Define "Competition"
Other companies selling similar goods and services
What are some examples of "land" in terms of factors of production
Arable land, forests, minerals, oil, water resources
Define the "law of demand" and "law of supply" (label them)
Law of Demand: The lower the price, the more something will be purchased
Law of Supply: The higher the price, the more of something can and will be produced
Define "comsumption"
Act of buying or using goods and services
Ms. Schramm has two options, she can either fly or drive to Minnesota. If she drives, it takes 6 hours. If she flies, it takes 1.5 hours. Make an opportunity cost and benefit chart to help her decision.
Flying to MN:
- Cost: Flying costs more money than driving to MN. Ms. Schramm could have used that money to spent in MN.
- Benefit: Flying to MN costs less time than driving to MN. This gives Ms. Schramm more time in MN.
Driving to MN:
- Cost: Driving takes more time than driving. This gives Ms. Schramm less time in MN.
- Benefit: Driving costs less money than flying to MN. Ms. Schramm could use this money to spend in MN.
Define "Traditional Economy"
Basic decisions made according to long held customs
- goods distributed according to tradition
Labor: Wages
Land: Rent
Capital: Interest
Define "Market Price"
the price at which buyers and sellers agree to trade
Define "renewable" and "non-renewable" resources
Renewable: replaceable
Non-Renewable: not replaceable
Ms. Schramm is choosing between making food at home and getting food from McDonalds. Make an opportunity cost and benefit chart to help her decide.
Getting McDonalds:
- Cost: Ms. Schramm loses the money that she could have spent on healthy foods/groceries
- Benefit: Ms. Schramm gains time she could use to do things she enjoys!
Making food at home:
- Cost: Ms. Schramm loses time that she could have used doing things she enjoys.
- Benefit: Ms. Schramm “saves” money since she uses ingredients she already has at home
Define "Free Enterprise"
System in which individuals in market economy are free to make decisions with little government control.
Define a "final good"
Something you find on the shelf at a store. You plan to not use this item for any other product.
Define "Profit"
Difference between total cost of production and total revenue from buyers
Define "Scarcity"
Resources are limited so there are never enough resources to produce all goods & services people want
Ms. Schramm is struggling to choose between sleeping and working on lesson planning. make an opportunity cost and benefit chart to help her decide.
Sleeping:
- Cost: Ms. Schramm loses the time that she could have spent working on lesson planning
- Benefit: Ms. Schramm has more energy and will have more energy to work on lesson planning later
Working on lesson planning:
- Cost: Ms. Schramm has less energy and has trouble focusing on lesson planning
- Benefit: Ms. Schramm loses time that she could have been spent sleeping and resting
Define "capitalism"
Economic system based on market economy and free enterprise
What are some examples of "personal human capital"
Education, physical abilities, appearance, character references, specialized training, and professional references
Define TWO influences on demand
Advertising, fads & fashion, necessities, and perceptions
Define "Trade Off"
A balance achieved between two desirable but incompatible features. A compromise!
The state of Missouri has banned smartphones from all schools in Missouri. Make a opportunity cost and benefit chart of this decision.
Yes phones:
- Cost: Students could be distracted by their smartphones instead of focusing on the lesson. Causes lower grades.
- Benefit: Students have more connection to their parents in emergency situations.
No phones:
- Cost: Students have less access to their parents in emergency situations. This could be dangerous.
- Benefit: Students are not distracted by their smartphones resulting in more focus during lessons and higher grades.
Define "Command Economy"
Where the government controls factors of production and makes the majority of basic economic decisions