Vocab
is the science of scarcity. It is the study of how people make choices when resources are limited.
Economics
What are the 3 basic questions we make in economics?
What, how, for whom to produce
What is the difference between a capital good and a consumer good?
Capital goods make other goods
Consumer is final user
what does the "u" represent in the production possibilities frontier?
unattainable
The next best trade-off NOT chosen
Opportunity Cost
What are the factors of production?
Land, labor, capital, entrepreneurship
. Everyone makes decisions by comparing
marginal costs and marginal benefits
Another term that means "alternative choices"
Trade-offs
we have unlimited wants but limited resources.
Scarcity
Describe the fundamental economic problem
Scarcity
In economics the term marginal
additional
As the production of one good goes up and more resources are used to create that good, the rate of production of the other decreases by an increasing rate.
Law of Increasing Costs
DOUBLE JEOPARDY!! (800 PTS)
What do Entrepreneurs do
1.Take The Initiative
2.Innovate
3.Act as the Risk Bearers
people make decisions to achieve maximum utility (benefit)
Rational Behavior
most desirable alternative given up when you make a choice.
Opportunity cost-
When making economic decisions, people try to get the most value for their investment, in other words, "the most bang for their buck." What is the name of the decision-making strategy used to indicate this?
Cost benefit analysis
Diagram representing various combinations of goods and/or services that an economy can produce when all productive resources are maximized
Production Possibilities Frontier
Due to scarcity, choices must be made. Every choice has a cost
trade-off
DOUBLE JEOPARDY!! (1000 PTS)
As a consumer, what role do you play in the circular flow of economic activity? (2 part answer)
Provide labor for income in the factor market
Spend money on goods/services in the product market
What are the 4 categories of good and services
consumption, capital, government, exports