Econ: lesson 1, chapter 1

what factors go into making a decision about HOW to produce the goods?

Available resources help determine how to produce goods.

what is gross domestic product and how is it a description of economic activity?

GDP is the monetary value of all final goods, services, and structures produced within a country's borders.

human capital and what is one important way you can invest in your own human capital?

Human capital is the sum of people's skills, abilities, health, knowledge, and motivation. By increasing your knowledge and skills through investment in your own education, you can earn higher salaries and lower your chance of being unemployed.

what risks does economic growth require? why does growth require sacrifice?

Limiting consumption without knowing the outcome of our decisions is risky. If we don't sacrifice, we will not have the resources to invest for future productivity.

what determines the monetary value of a good or service? why are some necessities less expensive than unnecessary items?

Scarcity and utility determine monetary value. Some necessities are useful but plentiful, so they may cost less than unnecessary goods and services that are very scarce and have utility.

list the four characteristics of the accumulated goods that make up economic wealth.

Tangibility, scarceness, utility, and transferability

why must societies decide FOR WHOM to produce?

There are many different groups that need or want a limited supply of goods.

The tools we use to create goods are called

capital goods

Who makes production decisions in a free-market economy?

consumers and privately owned businesses

What is the type of market where productive resources are bought and sold?

factor markets

A trade-off is what you must ____ when you make a choice

give up

A frontier can show the cost of ____ resources, which are available but unused.

idle

People, with their abilities and efforts, are called____, which can be affected dramatically by ____ and ____

labor; the next two blanks can include birthrates, immigration, famine, war, and disease

In economics, natural resources not created by people are called ___ and examples (they are finite)

land- deserts, fertile fields, forests, mineral deposits, livestock, sunshine, and the climate necessary to grow crops;

Where do buyers and sellers go to exchange a specific product?

markets

When making decisions it is useful to consider ____, or the value of the next best alternative that would be given up.

opportunity cost

utility

or the capacity to be useful and provide satisfaction. Utility is not something that is fixed or even measurable, like weight or height.

How can understanding economics make you a better citizen?

politics often involves economic issues, and studying economics will help you make better decisions

What is the type of market where goods and services are bought and sold?

product market

Economists use a to illustrate all possible combinations of outputs.

production possibilities curve

In addition to rights, consumers also have ____ , which include ____, ____ and ____.

responsibilities

What are the five consumer rights?

the right to safety; the right to be informed; the right to choose; the right to be heard; the right to redress

Opportunity costs that aren't monetary include ____ and ____.

time; convenience