Economics Unit 1 Review

This is the idea that we have unlimited wants and needs but limited resources

• scarcity

• supply

• demand

• opportunity cost

In order to be scarce, an item must be:

• desirable and limited

• desirable and abundant

• undesirable and limited

• undesirable and abundant

Things that are scarce tend to be:

• abundant

• expensive

• cheap

• easy to find

The factors of production include all of the following except:

• land

• human capital

• physical capital

• money

Alyssa works at Kroger. This is an example of:

• land

• human capital

• physical capital

• entrepreneurship

Tico starts a new business. This is an example of:

• land

• human capital

• physical capital

• entrepreneurship

Entrepreneurs take all of the following risks except?

• giving up stable/reliable income

• giving up a stable/reliable job

• taking on a job that may not be successful

• maintaining a job that makes them rich

Entrepreneurs are willing to take risks for all of the following reasons except:

• They believe their marginal cost is higher than their marginal benefit

• They believe in innovation

• They believe in bettering society

• They are creative and want to help the world

Because businesses have limited factors of production, they use this to determine their productive combinations and opportunity cost:

• LRAS graph

• PPC

• S/D graph

• AS/AD graph

This is the value of the next best alternative foregone:

• scarcity

• opportunity cost

• economics

• production possibilities