Economic Fundamentals Milestone Review

Unlimited wants and needs exceed limited resources

• Factors of Production

• Productive Resources

• Scarcity

• Marginal benefit

What are the 4 factors of production?

• land, labor, scarcity, entrepreneurship

• land, labor, capital, entrepreneurship

• labor, workers, capital, entrepreneurship

• land, labor, capital, marginal cost

Land is best described as

• human resources

• physical resources (i.e. tools)

• one who combines land labor and capital to create something new

• Natural resources

The two types of human resources are:

• Land, human capital

• physical, capital, Labor

• Labor, human capital

• entrepreneurship, labor

Motivation for starting business = making money

• Profit motive

• Job creation

• innovation

• improving society

Motivation for starting a business = making the world a better place to live in

• profit

• job creation

• improving society

• innovation

Motivation for starting a e-car business = technology allows the electric cars to run longer and faster

• profit

• job creation

• innovation

• improving society

Next best alternative given up =

• opportunity cost

• Scarcity

• physical capital

• trade-off

Every alternative given up once a choice is made

• opportunity cost

• trade-off

• scarcity

• factors of production

Rational decision

• an additional benefit gained as a result of one additional unit of production

• marginal cost is greater than or equal to marginal benefit

• an extra cost associated with producing one additional unit

• marginal benefit is greater than or equal to marginal cost