Economics Principles and Practices Chapter 1 Section Reviews Sabau
How do goods and services differ?
Both goods and services are economic products that help us satisfy our wants and needs. But goods are tangible, or things that can be touched, while services are not
Use a graphic organizer similar to the one below to describe the different transactions that take place in product markets
Businesses earn income<-Product Market<- Individuals purchase goods and services Businesses give goods and services->Product Market->Consumers spend
Why is investing in human capital beneficial?
Investing in human capital is beneficial because it leads to future productivity
How is economic growth related to productivity?
Economic growth, which is an increase in a nation's total output of goods and services over time, occurs due to a combination of factors. Productivity is the most important factor contributing to economic growth. When productivity increases, more goods and services can be produced with a given amount of time and resources, leading to economic growth
How does economics play a part in politics?
Economics plays a major part in politics as many of the policies and debates surround how to improve the economy and also appeal to all people in the economy, including individuals, businesses, and corporations
What decision-making strategies do economists recommend using?
Economists recommend using cost-benefit analysis when making decisions
How do economists demonstrate economic concepts using models?
Economists use models to predict the actions of people and businesses in an economy.
How does making choices help us deal with the problem of scarcity?
Human wants and needs are unlimited, but resources are limited
Look at Figure 1.3. How can individuals increase the flow of circular activity? What effect would this increase have on the other parts of the economy?
Individuals can increase the flow of money towards either factor markets or product markets to increase mutual output back into businesses. By increasing spending or funding, individuals can make a difference in the income generated to increase the output
How might major events such as labor strikes affect you and your community? Select a possible event and write a brief paragraph about the potential effects.
Labor strikes can decrease the output of products produced and can affect the consumer market for individuals. For example, the labor strike of a rubber company can affect the prices and supplies of rubber-made products in your local supermarket.
Use a graphic organizer similar to the one below to identify and describe the factors of production.
Land - Natural resources not created by people Capital - Tools, equipment, machinery, and factories used in the production of goods and services Labor - People with all their efforts, abilities, and skills Entrepreneur - A risktaker in search of profits who does something new with existing resources
Do you pay to drink from the water fountains at school? Explain why the water is not really free by stating who actually pays for it.
No. The water is not really free because the school pays for it
How does economic interdependence affect people and businesses in an economy?
People rely on businesses for their goods and businesses rely on people to buy their products
Explain the significance of scarcity, economics, need, want, factors of production, land, capital, capital good, labor, entrepreneur, and Gross Domestic Product (GDP).
Scarcity is the fundamental economic problem of meeting people's virtually unlimited wants with scarce resources. Economics is the social science dealing with how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources. Need is the basic requirement for survival, including food, clothing, and shelter. Want is something we would like to have but is not necessary for survival. Factors of production are the productive resources that make up the four categories of land, capital, labor, and entrepreneurs. Land is natural resources or other "gifts of nature" not created by human effort. Capital is tools, equipment, and factories used in the production of goods and services. Labor is people with all their efforts, abilities and skills. An entrepreneur is a risk-taking individual in search of profits. Gross domestic product is the dollar value of all final goods, services, and structures produced within a country's borders during a one-year period
Provide at least three examples each of specialized workers and specialized capital that are used in your school to provide the service of education. How would productivity change if they were not available to your school?
Specialized Workers; Science teachers teach rigorous Honors/AP courses for students with academic rigor. Custodial staff keeps the school clean to allow for students to focus. The school nurse specializes in treating sick and injured students so that other less qualified workers don't have to Specialized Capital Funds for improving and providing for school lunches is crucial for the overall quality of lunches. Specialized programs for technology are vital to providing technology literacy to students who may not be able to afford it. Supplying students with art supplies to help teach creativity. Without any of these programs or fundings, school would not be able to operate in the same manner and would have to diminish to accommodate.
Study the production possibilities frontier in Figure 1.6 on page 21. What does it mean when the frontier shifts outward? What possible causes exist for such a shift?
The frontier can shift outward if there is an increase in resources available to make the shift forward. For Figure 1.6, it would mean that the number of either cars or clothing that can be made is increased, and the frontier's maximum is increased
What three basic questions must every society answer, and why?
What goods and services will be produced? How will goods and services be produced? Who will consume the goods and services? Must be answered as long as there are not enough resources to satisfy people's seemingly unlimited wants and needs