Economics Basics
What is the study of how people meet their wants and needs?
Economics
What are the three factors of production?
land, labor, and capital?
What is the term for people who buy goods and services?
Consumers
Which economic system bases decisions on customs, traditions, and values?
traditional economy
What is a plan that shows how much money you earn and how much money you spend?
budget
What are the three basic economic questions every society must answer?
What are what to produce, how to produce it, and who receives it?
A farmer uses a field to grow corn. Which factor of production does the field represent?
land?
What is the term for people or businesses that make and sell goods and services?
Producers
In which economic system does the government make most or all economic decisions?
command economy
In a healthy budget, should your income be greater than, equal to, or less than your expenses?
What is greater than or equal to your expenses?
There is no limit to people's wants, but there are limits to the resources available to satisfy those wants. What is this problem called?
Scarcity
A restaurant hires workers to cook and serve customers. Which factor of production do the workers represent?
Labor
A popular new sneaker is released, and thousands of people want to buy it. What economic concept describes people's desire for the sneakers?
Demand
In which economic system are individuals and businesses generally free to decide what to produce and what prices to charge?
market economy
What is money called that someone borrows and agrees to pay back over time?
credit?
You have $20 and can either buy a video game or go to the movies. You choose the video game. What is the opportunity cost?
movie/the opportunity to go to the movies
A bakery buys ovens and computers to help make and sell its products. Which factor of production do these items represent?
Capital
A company makes $10,000 from selling products but spends $7,000 producing and selling them. How much profit does the company make?
$3,000
A country allows businesses to compete and people to own businesses, but the government also regulates businesses and provides some services. What type of economy is this?
mixed economy
You borrow $500 from a bank. The bank requires you to pay back $550. What is the extra $50 called?
What is interest?
A student has enough money to buy either a new pair of sneakers or a video game. She chooses the sneakers. Explain the economic concept involved and identify her opportunity cost.
choice and opportunity cost? Her opportunity cost is the video game she gave up.
A shoe company has a factory, machines, and workers. Identify all three factors of production represented in this situation.
Land, Labor, and Capital
A company raises the price of its product to make more money. However, customers decide the product is now too expensive and buy from a competitor instead. What economic idea does this demonstrate?
competition and supply and demand
A country has government involvement in the economy, but individuals can own businesses, consumers can make choices, and businesses compete with each other. Which economic system is this, and why?
mixed economy, because it combines a market economy with a role for the government?
Jamal has $1,000 in income and $1,200 in expenses each month. He also wants to save money. What is wrong with his budget, and what should he do?
His expenses are greater than his income, so he is spending more than he earns. He should reduce expenses and/or increase income, and make room for savings.