Unit 1: Fundamental Economic Concepts Review

Define scarcity

• Unlimited wants and needs vs limited resources

• Limited wants and needs vs unlimited resources

• Opportunity cost

• Capital, enterprise, land, labor

Define opportunity cost

• The value of the next best alternative that must be sacrificed to obtain something else

• Unlimited wants and needs vs limited resources

• Limited wants and needs vs unlimited resources

• The study of choice and scarcity

Define economics

• The study of scarcity, choice, and opportunity cost

• The most common type of business organization

• Things we would like to have but not needed for survival

• Human effort and skills

Define factors of production

• Must be present to produce goods and services

• Decisions are made by a central government

• Owners of stock in a company

• Unused resources

Which of the following is NOT an example of labor?

• A person sweeping the floor

• An employee supervising machines

• A teacher leading a lesson

• Factories to assemble cars

Which of the following is NOT an example of land?

• Solar energy

• Fish from the sea

• Oil

• Robots

What is a word to help remember the 4 factors of production?

• CELL

• SPLAT

• ECONOMICS

• BUCKS

Which of the following is NOT a factor of production?

• Capital

• Enterprise

• Land

• Labor

• Scarcity

Define production possibilities frontier

• Represents various combinations of goods and services and economy can produce when all its resources are in use

• Unlimited wants and needs vs limited resources

• The study of scarcity, choice, and opportunity cost

• Machines, factories, and tools

Explain what any point along the PPF represents

• Full use of resources

• Idle resources

• Economic growth

• Economic decline