Economic Basics

What is an economy?

• Goods and services that are sent to another country

• A shortage of a product

• A system of buying, selling, and producing goods and services

• Goods and services that are brought in from another country

What does scarcity mean?

• Goods and services that are brought in from another country

• A system of buying, selling, and producing goods and services

• Goods and services that are sent to another country

• A shortage of a product

What determines the price of a product?

• Profit

• Supply and demand

• Factors of production

• Income

Which factor of production includes raw materials?

• Natural Resources

• Capital

• Labor

• Entrepreneurs

What is capital in the context of production?

• Goods used to make other goods and services

• Human effort, skills, and abilities

• Organizing, managing, and assuming the risk of a business

• Raw materials

What is labor in the context of production?

• Goods used to make other goods and services

• Human effort, skills, and abilities

• Organizing, managing, and assuming the risk of a business

• Raw materials

What is an entrepreneur?

• A person who organizes, manages, and assumes the risk of a business

• Goods and services that are brought in from another country

• A shortage of a product

• A system of buying, selling, and producing goods and services

What do entrepreneurs do at the beginning of a business?

• Buy raw materials

• Put in their own capital and labor

• Expand their business to others

• Hire employees

What is the purpose of income for workers?

• To receive money for selling labor

• To buy raw materials

• To make a profit

• To pay for capital

What happens to the price of a product when there is a scarcity?

• The price increases

• The price is determined by supply and demand

• The price decreases

• The price stays the same