Topic 11: Economic Basics

What is the economy?

• a system of producing, selling, & buying goods an services

• a system of trading off something for something more important

• a situation where you don't have enough money to go to the movies

What is scarcity?

• money an individual makes from a job

• the issue of having unlimited human wants in a world of limited resources

• value of the thing that we give up

What is an opportunity cost?

• additional money that is made from a unique opportunity

• problem of having more wants than available resources

• system of buying or selling goods

• the value of the thing that is given up when a choice is made

What is supply?

• the desire for a good or service

• the amount of money you have left after expenses are paid

• the amount of a good or service that is available for purchase

• the popularity of a good or service

What is demand?

• the desire to have a good or service and the number of people ready to buy it

• system of buying and selling goods and services

• the issue of running out of supplies

_____________ are things that people make or use to satisfy their needs and wants.

• Goods

• Services

• Producers

• Consumers

________________ are activities that satisfy people’s needs and wants.

• Goods

• Services

• Needs

• Wants

Which statement best characterizes opportunity cost?

• The amount of a good that businesses are able to produce

• The amount of money left over after expenses have been paid

• The value of a product that you give up in a tradeoff with another product

• The number of people who are ready to buy a product at a certain price

The money an individual or business has left after paying expenses is called

• capital

• scarcity

• profit

• factors of production

The price of a good or service is usually determined by the laws of supply and demand.

• True

• False