Factors of Production
Define entrepreneur and give an example.
Why do we study PPF curves?
To see alternative ways to use an economy's productive resources and the costs of doing so.
Name one type of economy and give an example
Ex: Mixed Economy - the United States
Drinking fountain - tool used inside the school, part of infrastructure
Water - land resource
Why do we want to produce on the PPF curve itself?
Because that is where we are using our resources the most efficiently, and maximizing production!
What is the opportunity cost of going to college full time?
The time/money you could earn at a job in those 4 years in the work force.
Which type of economy is a synonym for capitalism and free enterprise?
Market Economy / Free Market Economy
A tractor is what type of resource (in the factors of production)?
A tractor is an example of physical capital.
A point to the left of / under the curve would indicate....
underutilization of resources and the economy
Explain the difference between opportunity cost and trade offs (provide examples).
Tradeoffs - cost/benefits BEFORE the decision is made
Who answers the basic economy questions in a command economy AND which type of government system (socialism, capitalism, communism) most closely reflects it?
A central government ; communism
Explain the difference between human and physical capital, and provide examples of each.
Human Capital - knowledge, skills
Physical Capital - tools/buildings/infrastructure to help you make a good/service
What happens when you attempt to produce above a PPF curve? Why?
Producing above a PPF curve is impossible because you do not have enough resources to produce at that point on the graph.
What's the difference between scarcity and shortage?
Scarcity - unlimited wants vs limited resources (natural resources typically)
Shortage - temporary supply deficit
What does it mean when economists debate about 'guns vs. butter' in the economy?
Guns vs butter is the relationship between social services and the military and how the government chooses to fund each one, making trade offs.
Name the four factors of production and PROVIDE EXAMPLES OF EACH.
Land
Labor
Capital
Entrepreneurship
Explain TWO possible reasons that a PPF curve could shift outward and explain what it means for the economy.
Ex: more workers, technology increase, more resources to use, etc.
Explain the Circular Flow Model (Market for Resources AND Market for Goods and Services)
In the market for resources, firms acquire factors of production (land, labor, capital, entrepreneurship) from households, and in return, households get a wage/salary.
In the market for goods and services, firms give households completed goods and services in exchange for revenue/money for the product.
What are the three economic questions?
What to produce?
How to produce?
For whom to produce?
Name these things in relation to HEALTHCARE:
1. Advantage of a command economy
2. Disadvantage of a free market economy
Command economy - equal access to healthcare and education
Free Market - impoverished don't have as much access to healthcare or education