Economy section 1 quiz review

Resources

Are needed to produce the goods and services that satisfy our wants.

Why did chris rock not go to college after becoming famous

Going to college would be too "expensive" because of opportunity cost. The time he would have wasted going to college he could have been making money in movies or doing stand up comedy.

Is the opportunity cost of attending high school the same for all students? Why or why not?

No, the opportunity cost is not the same for every high school student because not everyone is giving up the same amount of opportunity cost.

Because scarcity exists, people must make choices. Why?

Scarcity means that our wants are greater than the resources available. Because we can't satisfy all of our wants we must make a decision on which one to satisfy

productions possibilities frontier

Shows all possible combinations of two goods that an economy can produce in a certain period of time. AKA PPF

opportunity cost

The most valued opportunity or alternative you give up to do something, that is somethings cost.

Want

Things people desire to have.

Give me an example to illustrate how a person may incur an opportunity cost without paying anyone any money?

You stay inside and play video games, while you could have been hanging out with your friends.

scarcity

condition in which our wants are greater than the resources available.

Trade-off

getting more of one good while getting less of another

Economics

is the science that studies the choices people make as they try to satisfy their wants and needs in a world of scarcity.

Rationing device

some way to decide who gets what portion of all the resources and goods available