1. Scarcity & Choice
What is scarcity?
Limited resources vs unlimited wants
What is an economic model?
Simplified representation of reality
What type of economy is Canada?
Mixed economy
What is a budget?
Plan for income and expenses
If you buy shoes instead of saving money, what is the opportunity cost?
Savings
Define opportunity cost
Next best alternative given up
What happens to price if demand increases?
Price increases
Difference between market and command economy?
Market = individuals decide; Command = government controls
What is good debt?
Debt that helps future (education, business)
Why might someone still use a payday loan?
Urgent need, lack of options
Why does scarcity force choice?
Not enough resources → must decide
What is equilibrium?
Where supply = demand
What is capitalism?
Private ownership, profit motive
What is bad debt?
High interest, no long-term benefit
Is a student loan good or bad debt? Explain
Depends on context
Give a real-life example of opportunity cost
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What happens if supply decreases?
Price increases
Why does Canada use a mixed economy?
Balance of freedom + government services
What is interest?
Cost of borrowing money
Why might governments regulate markets?
Protect consumers, ensure stability
Explain why some decisions have greater economic significance
Larger long-term impact (e.g., loans, career)
Explain stability vs variability in markets
Stable = little change, variable = frequent fluctuations
Explain how perspective affects economic decisions
Different groups (gov, business, consumers) see issues differently
What is ROI?
Profit from investment compared to cost
Explain how scarcity affects financial planning
Limited money → budgeting and trade-offs