Fundamental Economics Concepts

What is economics?

• Study of money

• Study of how governments make money

• Study of choices individuals, businesses, and governments make.

• How productive societies are

What's the number one problem economies face?

• inefficiency

• high productivity

• scarcity

• too many choices

WHAT ARE THE 4 FACTORS OF PRODUCTION?

• Land, Capital, Need & Want

• Land, Labor, Capital, Entrepreneurs

• Water, Air, Food & Shelter

• Land, Capital, Good & Service

What is the production possibilities curve?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing

What is opportunity cost?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs

The opportunity cost of increasing production from 4 to 7 boats is

• 1 boat
• 2 boats
• 2 trucks
• 3 trucks

Efficiency is producing the maximum possible output from available resources

• True
• False

In the circular flow model, the product market describes _____.

• stores that sell goods and services to households
• the government paying for public goods
• households selling their labor to businesses
• households receive income from businesses

In this market, businesses buy resources they need to produce goods and services.

• factor market
• stores
• product market
•  businesses