Economics Lesson 22

What are three basic economic questions that people in a society decide?

1. What goods and services will be produced? 2. How would the goods and services be produced? 3. How will the goods and services be distributed to the people?

What is a cost-benefit analysis?

Finding out what the cost and benefit is, a step before taking it to see if the benefit is greater than the cost.

What are some examples of cost-benefit analysis by an individual, a business, and government?

I: Should I purchase this item? B: Will making this new product bring in the stackz? G: Will making a new park draw in enough people for the purchase of constructing this park to be worth it?

Why is the study of margins important?

Most decisions are typically based around whether or not one should take the next step.

What is an economic margin ?

One small step for man, one giant step for mankind.

What are the consequences of believing in an unlimited economic pie?

Some can go into debt.

What is a marginal benefit?

The change in benefit resulting from a specific action.

What is a marginal cost?

The change in total cost resulting from a specific action.

In what ways do people have to make economic choices?

To make a decent living.

Why do people have to make economic choises?

We have limited resources.