Choices & Opportunity Cost
Every decision involves giving something up. Economists call this type of choice between alternatives this.
What is a trade-off?
Workers who use their time and abilities to help produce goods and services represent this factor of production.
What is labor? (Or Human Resources)
In this type of economy, the government makes the major decisions about what, how, and for whom goods will be produced.
What is a command economy?
Human desires continue to grow, while the resources available to satisfy them are limited. This creates this basic economic problem.
What is scarcity?
A coffee shop gives customers a free drink after they purchase ten drinks. The free drink is this type of incentive.
What is a positive incentive?
You spend Saturday studying instead of going to a concert. The concert experience you gave up represents this economic concept.
What is opportunity cost?
Forests, water, minerals, and farmland all belong to this factor of production.
What is land?
In this economic system, customs and practices passed down over generations help determine what and how people produce.
What is a traditional economy?
A restaurant has only five employees but receives more orders than those workers can handle. This situation demonstrates this economic concept.
What is scarcity of labor?
A school gives students detention for repeatedly arriving late. The detention is this type of incentive.
What is a negative incentive?
When choosing between two options, an economist would tell you to consider both the advantages and disadvantages, also known as these.
What are Pros & Cons (Costs & Benefits)
Machines, equipment, and buildings that businesses use to make other goods and services belong to this factor of production.
What is capital?
This economic system combines characteristics of government economic involvement with characteristics of a market economy.
What is a mixed economy?
Economists assume people have a limited amount of resources but this type of wants.
What are unlimited wants?
A company offers employees an extra $500 if they exceed their monthly sales goal. The company is using an incentive because incentives are designed to influence this.
What is people's behavior?
Marcus can work for four hours or spend those four hours at the beach. If he chooses the beach, the wages he could have earned are an example of this.
What is opportunity cost?
Sophia takes a risk and opens a new bakery using her own business idea. She represents this factor of production.
What is entrepreneurship?
Which of the 5 W's (1 H) are important to production?
What is WHO, WHAT, & HOW?
A new pair of sneakers and a haircut are both outputs of production, but economists place them into these two different categories.
What are goods and services?
Before buying a new car, Ava considers the price, reliability, gas mileage, and benefits of owning it. She is following the economic principle of doing this before making a rational decision.
What is comparing costs and benefits? (Pros & Cons?)
A student has three options after high school: college, full-time work, or job training. She chooses college. Economists define her opportunity cost as the value of this.
What is the best alternative she gave up?
A bakery uses wheat, employees, ovens, and an owner who organizes the business. Together, these resources are known by this economic term.
What are the factors of production?
Consumers and private businesses play the major role in deciding what gets produced in this type of economy.
What is a market economy?
Economics requires people and societies to make choices because they cannot have everything they want. This happens because resources are ______ while wants are ______.
What are limited resources and unlimited wants?
A town wants residents to recycle more. Officials begin offering a reward for recycling rather than charging residents a penalty for failing to recycle. The reward would be classified as this.
What is a positive incentive?