Fun questions
What is scarcity?
We have unlimited wants and limited resources.
What does utility mean?
Satisfaction.
What is an investment?
Money spent by businesses to improve production.
What is productivity?
A measure of efficiency that shows the number of outputs per unit of input.
What are the two types of capital?
Human capital and physical capital.
Name 1 of the 5 key economic assumptions.
Society has unlimited wants and limited resources (scarcity).
Due to scarcity, choices must be made. Every choice has a cost (a trade off).
Everyone’s goal is to make choices that maximize their satisfaction. Everyone acts in their own “self-interest”.
Everyone makes decisions by comparing the marginal costs and marginal benefits of every choice.
Real-life situations can be explained and analyzed through simplified models and graphs.
What's the difference between capital goods and consumer goods?
Consumer goods are created for direct consumption, and capital goods are created for indirect consumption.
What are 3 of the 4 factors of production?
1. Land
2. Labor
3. Capital
4. Entrepreneurship
What's the difference between price and cost?
Price is the amount the buyer, or consumer, pays, cost is the amount seller pays to produce good.
Explain what labor is.
Any effort a person devotes to a task for which that person is paid.
What's the difference between positive statements and normative statements?
Positive statements are based on facts, not on judgement, normative statements include value judgements.
What is microeconomics?
Study of small economic units such as individuals, firms, and markets.
What is physical capital?
Any human-made resource that is used to create other goods and services.
What is human capital?
Any skills or knowledge gained by a worker through education and experience.
What do marginal and allocate mean?
Marginal - Additional
Allocate - Distribute