LT1.1 - POD B

outputs

goods and services of value to households

Resources include . . .

1. Land 2. Labor 3. Machines

What do we give up when we make a choice?

A tradeoff

Renewable Resources

Can be replaced as we use them. Trees

Every point on the curve of PPC graphs is _____

Efficient (max amount of goods and services)

Macroeconomics

Focus on the work is og an economy as a whole

Marginal Utility

Is the extra satisfaction you get from an increase on additional unit of a good or service; After a workout buying a gatorade and chugging it, it really quenches your thirst. You drink another one this one does not bring you as much satisfaction as you are not as thirsty. Can lead to negative unity.

What is the difference between human capital and physical capital?

Human capital is knowledge and skill learned through education while physical capital is the tools and machines used

Every point inside the curve of PPC graphs is _____

Inefficient

What is the production possibilities curve (PPC)?

It represents the best that an economy can do with its current factors of production.

What does a production possibilities frontier (PPF) show? (What is its purpose?)

It shows how an economy might use its resources to produce two goods.

factors of production

Land, Capital, Labor, Entrepreneurship

Microeconomics

Looks at economic decisions making by individuals, households, and business

Why do we have to make choices?

Materials are limited and cannot satisfy our unlimited wants; All goods and services are also scare

Nonrenewable Resources

Ocean that is used, they are gone. Oil

Utility

Satisfaction one gains from consuming a product or service; Studying for a test lead to better grades

What is economics?

Social science and thinking about how the world works. The study of how people chooses their limited resources to satisfy their unlimited wants

Trade Offs

The alternative choice not chosen; Binging netflix lead to the tradeoff of not doing your hw or not studying leading to worse grades

Diminishing Marginal Utility

The is no longer a satisfaction of the utility; The pizza that once satisfied you now makes you full and you are unsatisfied.

Economics is...

The science of decision making. However it is defined in many ways. Some are, the analyzing of everyday enigmas, analyzing positive economics which describes how things are, making policy recommendations or normative economics. Studying how people use limited resources to satisfy unlimited wants, and the teaching of better decision making.

Opportunity Cost

The value of the next best alternative that you could have chosen; If a family buys a computer they can't say that monte to pay for their second choice, a trip

What characteristics make someone a successful entrepreneur?

They need to be innovating, a good strategist, a risk taker, and a spark plug

When making a decision, how are trade offs different from the opportunity cost?

Trade Offs are all the opponents or alternative choices, while opportunity cost is simple thesecon alternative choice lost.

Every point outside the curve of PPC graphs is _____

Unattainable (without additional resources)

How can we satisfy our wants with limited resources?

We have to make choices because resources are scarce, Economic is all about choices

Shortage

a lack of something, when supply does not meet demand. Temporary - ends when production is resumed, or new resources of supply rae found

Perpetual Resources

a natural resource that is widely available and in no danger of being used up; examples include sunlight and wind

Because of scarcity, we have to make . . .

choices

Who was Adam Smith and why is he important to the study of economics?

considered the father of economics. He was one of the first to bring up economic ideas and questions. Some of his writings he did, for example the wealth of nations, allowed us to learn more about economics. He also proposed free markets and said that competitiveness and limited government in comins allow economies to grow.

Equation: land+labor+capital =

goods and services

Scarcity

is forever and there will never be enough of everything to satisfy wants

resources are . . .

limited

Land Resources

natural resources of a nation used to produce goods and services

Output/input =

productivity

Economists say all resources are ...

scarce

goods and services . . .

scarce

input is

scarce resources

What happens to the PPC if a resource becomes less productive? - the entire graph shifts inwardly, movies to the left

shirinking, economy, struggling

shortages are ____, scarcity is _______

temporary, forever

What happens to the PPC if there is a new technology that makes the resources that produce a certain good (in this case a scream), more productive?

the graph is moved outward. - moves to the right. Expanding, growing economy

good

things that have been creatse for sale or use

wants are ....

unlimited

Services

works done by someone else for which a consumer or business is willing to pay