Economics

Why do we use substitute goods? (ex: running out of tp)

A substitute is a product or service that can be easily replaced with another by consumers. In economics, products are often substitutes if the demand for one product increases when the price of the other goes up. Substitutes provide choices and alternatives for consumers while creating competition and lower prices in the marketplace.

How is technology a resource multiplier?

Because it amplifies ones efforts to produce more output.

Explain why services are excluded from the measure of wealth.

Because wealth comes from an abundance of products that are tangible, scarce, useful, and transferable. Services are never scarce, because they can always be provided

Describe the relationship between goods, services, and consumers.

Goods are what you're getting. (food, toys, phones) Services is a worker serving you. (Waiter, barber, cashier) Consumer is the person buying it.

GDP

Gross Domestic Product- the total market value of all final goods and services produced annually in an economy

Distinguish b/t product markets and factor markets.

Factor markets are markets where the productive resources are bought and sold, and Product markets are markets where producers sell their goods and services to customers

paradox of value

a contradiction between necessities and values.

production possibilities frontier

a diagram representing various combinations of goods and or services an economy can produce when all productive resources are fully employed.

Explain the production possibilities frontier

a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the variable production technology

What is inelastic demand?

an increase or decrease in price will not significantly affect demand for the product

want

an item that we desire but that is not essential to survival

What is a scientific field that focuses on creating machines that require intelligence?

artificial intelligence

need

basic need for survival including food, shelter, and clothing.

wealth

in an economic sense, is the accumulation of those products that are tangible, scarce, useful, and transferable from one person to another.

Explain why economic education is important

it helps people become better decision makers

economic growth

occurs when a nation's total output of goods and services increase over time.

Trade-off-

or alternate choices whenever they make an economic decision.

value

refers to a worth that can be expressed in dollars and cents.

Factors of Production-

resources required to produce the things we would like to have are land, capital, labor and entrepreneurship.

What is a trade-off?

sacrificing one good or service to purchase or produce another

What is entrepreneurial ability?

the ability to bring together the other factors of production to successfully produce and sell goods and services

Identify the cause of scarcity. Why is scarcity the main idea in economics?

the condition that results from society not having enough resources to produce all of the things people would like to have.

opportunity cost

the cost of the best next best alternative use of money, time or resources when one choice is made rather than another.

What is utlity?

the extent to which something provides economic value greater than its cost. (make sure it is worth it)

land

"gifts of nature" or natural resources not created by humans.

Economics-

-the study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources.

Describe the incremental decision making

Making decisions with small steps so a decision can be reimbursed

What is the difference between macroeconomics and microeconomics?

Microeconomics is the study of economics on the individual level, whereas macroeconomics is the study of economics on the national or global level. When we talk about a particular firm, group, family or an individual than it is microeconomics.

Describe the nature of an opportunity cost. What is opportunity cost?

Opportunity cost is the cost of taking one decision over another. This cost is not only financial, but also in time, effort, and utility. Opportunity cost can lead to optimal decision making when factors such as price, time, effort, and utility are considered. Such as going to the football game instead of working would include the money not earned at your job

Why do we use rational decision-making regarding economics?

Rational choice theory states that individuals use rational calculations to make rational choices and achieve outcomes that are aligned with their own personal objectives. These results are also associated with maximizing an individual's self-interest. Using rational choice theory is expected to result in outcomes that provide people with the greatest benefit and satisfaction, given the limited option they have available.

What is the difference between a scarcity curve and a production possibilities curve? P. 23 chart 1.6

The bowed-out production possibilities curve for Alpine Sports illustrates the law of increasing opportunity cost. Scarcity implies that a production possibilities curve is downward sloping; the law of increasing opportunity cost implies that it will be bowed out, or concave, in shape.

True or False: Technology is a resource multiplier.

The lifecycle of every project and company goes through high and low demand when it comes to engineering productivity. True

What is the law of diminishing marginal utility?

The satisfaction received by obtaining one more unit of a good declines as one consumes more of it

Explain why economists argue that productivity is important.

Without productivity, there won't be any efficiency in the economy

Identify the economic concept illustrated by the production possibilities frontier.

There are many alternative ways of production, which is why it's called the "possibilities" frontier

Explain TINSTAAFL? What does it mean?

There is no such thing as a free lunch. Everything in life has a cost even if it seems "free" to us.

Entrepreneur

a risk taker in search of profits who does something new with existing resources.

Utility-

capacity to be useful and provide satisfaction.

Labor-

people with all their efforts, abilities and skills.

Describe the factors of production required to deliver a service like education. (What are the factors of production)

primary, secondary, tertiary, and non-formal education.

production

the process of creating goods and services, can take place.

Standard of living-

the quality of life based on the possession of the necessities and luxuries that make life easier.

What is economics?

the study of how we make decisions in a world where resources are limited

human capital-

the sums of skills, abilities, health, and motivation of people.

capital

the tools, equipment, machinery and factories used to produce goods and services.

Service-

work that is performed for someone