Factors of Production
What is an Input?
Scarce resources that go into making a product.
What happens when output increases but input stays the same?
Productivity increases.
What is the primary concept illustrated by the Production Possibilities Frontier (PPF)?
Tradeoffs in an economy
What are incentives?
Motives to achieve a desired result.
Define opportunity cost.
the value of the next best alternative that is given up when making a choice; a measure of what you must give up to get what you want
What is an Output?
The goods or services that are created using inputs.
How is productivity measured in economics?
Productivity = Output รท Input.
How does the PPF typically appear on a graph?
As a bowed-out curve.
What is a good?
Physical item created for selling.
What type of resource is sunlight considered to be?
Perpetual resource.
Which of the following best describes the relationship between entrepreneurship and economic growth?
Entrepreneurship fosters innovation and drives economic growth
How would an increase in the working-age population most likely affect a country's Production Possibilities Frontier?
Shift it outward
What can cause a shift of the entire PPF curve to the right?
Technological advancement that increases productivity.
What is a service?
Actions or activities done for buyers.
What type of resource is oil considered to be?
Nonrenewable resource.
What are the 4 main factors of production?
Land, Labor, Capital, and Entrepreneurship.
How can technology impact productivity?
Technology can increase productivity by making processes more efficient.
What can cause the PPF curve to shift to the left?
A natural disaster that reduces production capacity.
What is Labor?
The effort and time put into production for which someone is paid.
What type of resource are trees considered to be?
Renewable resource.
What is Human Capital (250) and what is Physical Capital (250)?
Human capital: the expertise, experience, skill, education, and knowledge of laborers
Physical capital: physical, man-made tools, machines, and resources involved in the production process
What role does human capital play in shifting the Production Possibilities Frontier?
It enhances the skills and overall productivity of the workforce
What does a point outside the PPF curve represent?
Unattainable production with current resources.
What is an Entrepreneur?
The risk taker who combines the factors of production to create goods and services.
What does it mean when productivity increases?
More goods/services are produced with the same or fewer inputs.