Scarcity & Shortages
True or False: Resources like time, money, land, labor are limited.
True
Wind, Wood, Water, Sunlight, Fossil Fuels
Give me an example of a trade off?
Answers can vary
What are the three economic fundamental questions?
1. What goods and services are to be produced?
2. How are goods and services to be produced?
3. For whom are goods and services to be produced?
Describe two features of a Traditional Economy.
- Oldest type of economic system
- Based on customs and traditions
- Typically found in indigenous or ancient societies
Housing, Labor, Natural Resources
What is the production equation?
Land + Labor + Capital = Goods and Services
Give an example of an opportunity cost.
Answers will vary.
"What to produce" addresses what?
In Command Economies who decides what to produce?
The ruling authority.
When do shortages resolve?
When production increases and demand decreases.
What are the two types of Labor?
Physical Labor and Mental Labor
What is an example of marginal utility.
Answers will vary.
The question " How to Produce" deals with what?
Deals with the methods and technologies used to create goods and services.
In Market economies how do they decide who they produce for?
It is based on the ability to pay and consumer preferences.
Fads or Trends and Natural Disasters.
What are the 4 component of Production Equation?
Labor, Capital, Land, Entrepreneurship
What is marginal utility?
Refers to the extra satisfaction or pleasure gained from consuming one additional unit of a good or service.
What are the 4 different approaches for whom a business should product for?
1. Ability to pay
2. Equal distribution
3. First come, first served
4. Distribution according to need
Supply and Demand
Explain the difference between scarcity and shortages.
Scarcity means that there is not enough of something to fulfill everyone's desires.
A shortage is when there is not enough of a good or service available to meet the demand at a given price.
What two types of Capital are there?
Physical Capital and Financial Capital
What are the 4 key features of the PPF?
1. Combination of Goods
2. Efficient Production
3. Inefficient Production
4. Unattainable Production
What are the 6 economic goals?
1. Economic freedom
2. Economic efficiency
3. Economic equity
4. Economic growth
5. Economic security
6. Economic stability
What is the difference between a market economy and a mixed economy?
In a mixed economy the government and private individuals/businesses play important roles in economic decision-making.
In a market economy its based on only individual decision making.