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What is Economics?
The study of how people satisfy unlimited needs and wants with limited resources.
Unlimited needs and wants combined with limited resources create what condition?
Scarcity
What is a "trade off" in Economics?
The things we don't choose/buy or the alternatives.
What is opportunity cost?
the most desirable alternative given up as the result of a decision
What is the opportunity cost of choosing to buy a car over a house?
The ability to have your own home/shelter
Name all 4 factors of production
Land, Labor, Capital, Entrepreneur
A professional Baseball Player's bat is an example of what Factor of Production?
Capital
Give an example of what each factor of production might be in the production of tires.
Rubber, Machine, workers, company owner
What is Capital?
Any human-made resource that is used to create other goods and services.
What is land?
All of the natural resources that are used to produce goods and services.
What is labor?
Any effort a person devotes to a task for which that person is paid.
What is entrepreneur (as it applies to economics)?
A person who assembles the factors of production to create new goods and services.
What does the production possibilities graph show?
alternative ways to use an economy’s productive resources
What is Marginal Cost?
the cost of procuring one more item. (Of making one more thing, deciding to do one more thing,)
What is Marginal Benefit?
the benefit associated with that one additional item.
What is it called when one weighs the cost and benefits of an economic decision?
Marginal Analysis
