Goods and Services
goods
What are the 4 factors of production?
land, labor, capital, and entrepreneurship
What is opportunity cost?
The value of the next best alternative that you could have chosen instead.
The production possibilities frontier (PPF) is ______________ in the form of a _________ ____________. Hint: Think about the economic tools.
economic model, line graph
What is utility?
The satisfaction or pleasure gained from consuming a product, a service, or from taking an action.
These are described as activities done for us by others.
services
Scarce resources that go into production are __________ while the goods and services produced using these resources are ___________.
inputs, outputs
What is a helpful tool when evaluating the alternatives?
decision matrix
The PPF can help measure ______________ ______ of different production choices.
opportunity cost
What is the law of diminishing marginal utility? Give an example.
As the quantity of a good consumed increases, the marginal utility of each additional unit decreases. Eating 1-2 slices of pizza satisfies your hunger, but eating 12 slices of pizza will make you sick.
Why are goods and services scarce?
False- In economics, money is specifically identified as financial capital. Capital refers to the tools, machines, or buildings used in production.
What is the economic principle used when evaluating your alternatives?
thinking at the margin
What do economists use the PPF for?
To show how an economy might use its resources/technology to produce two goods. The graph shows all production possibilities and if the resources are being utilized to their full potential.
What are renewable and nonrenewable resources? Give an example of each.
Renewable resources can be replenished as they are used with careful planning (forests, fresh water, fish, etc.). Nonrenewable resources are gone forever once they are used (coal, oil, natural gas, etc.).
Shortages are ______________ but scarcity is ______________.
temporary, forever
What are the 2 ways that productivity can be raised?
Getting more output from the same inputs or getting the same output from fewer inputs
Catherine can either attend a rock concert or work. Catherine attends the rock concert. What is the tradeoff and opportunity cost of this decision?
Tradeoff: Catherine cannot go to work. Opportunity cost: She does not make money.
A PPF is a snapshot of an economy's production possibilities at a specific moment. What happens in the real world?
In the real world, the possibilities are constantly changing as economic conditions change.
What are perpetual resources? Give an example.
Perpetual resources are widely available and in NO danger of being used up (sunlight and wind).
What is a shortage, and give two examples of when this has taken place.
A shortage is a lack of something that is desired, a condition that occurs when there is less of a good or service available than people want at the current price. Examples could include war, natural disasters, COVID-19, etc.
What are the 4 roles of an entrepreneur? Explain each role.
Innovator: think of ways to turn new inventions, tech, or techniques into goods or services that people will want. Strategist: Supply the vision and make key decisions. Risk taker: take on the risks of starting a new business (time, energy, money, etc.). Sparkplug: Supply the energy, drive, and enthusiasm needed to turn ideas into realities.
What is the classic example used by economists to describe the tradeoffs a society can face?
the guns-versus-butter tradeoff
If the PPF shifts to the right, then the economy is __________ and if the PPF shifts to the left, then the economy is _____________.
growing, shrinking
Productivity = _________ / _________
output divided by input