econ

Q1: A sales clerk represents which factor of production?

Labor

T1: what are the factors of production?

land, labor, capital

Q3: If Capeland switches from producing 0 watermelons to producing 18 million tons of watermelons, what does it give up?

6 million pairs of shoes

T3: How would the widespread use of a new type of chemical fertilizer affect a nation's production possibilities frontier? Why?

A new type of chemical fertilizer would cause the production possibilities frontier to shift to the right because they will be able to produce more watermelons.

T3: How does a production possibilities frontier show efficient uses of a country's resources?

A production possibilities frontier shows efficient uses of a country's resources because it shows that the country is using all of their resources efficiently to maximize production.

T1: What is the difference between scarcity and shortage?

A shortage occurs whenever quantity demanded is greater than the quantity supplied at market place. While, scarcity is a naturally occuring limitation on the resource that cannot be replenished.

Q3 Concept: Explain how production possibilities curves show efficiency, growth, and opportunity cost.

Efficiency is the curve and inefficiency is below the curve. Growth is anything above the graph. Cost is the amount you give up.

Q1: Which of the following is a benefit that a business is likely to attain from purchasing new equipment?

Increased productivity

Q3 Concept: Explain why a country's production possibilities depend on its resources and technology.

It deals with the available production in a nation's economy at a specific time with specific resources and technology.

Test Review 1: What does the production possibility frontier show?

It illustrates the varying amount of two products that can be produced when both depend on the same finite resources.

Test Review 1: List the 3 factors of production.

Land, Labor, Capital

Test Review 1: What is marginal cost and what is its role in decision making?

Marginal cost is the cost added by producing one additional unit of a product or service. It's role is it allows you to evaluate the outcome of adding or decreasing an unit.

Q1 Concept: What's the difference between physical and human capital?

Physical capital implies the non-human assets of the company, such as plant and machinery, tools/equipments, office supplies, etc that help in the process of production. Human capital refers to stock of knowledge, talent, skills and abilities brought in by the employee to the organization.

Q1: Why is there scarcity even in an affluent country like the United States?

Resources are limited but wants are unlimited.

Test Review 1: Why is scarcity an important concept in Economics?

Scarcity forces people to chose how they will use their resources in an attempt how they will use their resources in an attempt to satisfy their unlimited wants and desires.

Q3: Which of the following courses of action makes the MOST sense in today's world for manual laborers who have been replaced by robots?

Seek training in the latest technology related to a type of work they enjoy.

T2: Suppose a friend is trying to decide whether to purchase a car. Use what you know about opportunity cost to help your friend arrive at a wise decision.

The benefit of buying a car is to have a more accessible form of transportation and it feels more personalized. However, it is very expensive. There are many alternatives that are inexpensive, allowing you to save and invest your money in other ways. Some are public transportation, carpooling, etc. Nonetheless, these options are less accessible and personalized.

Q3: A country has two main products: hats and grapes. The country decides to start making more and more hats and fewer and fewer grapes. Why does the opportunity cost of making hats increase as more and more hats are produced?

The best resources for producing grapes are least suited to making hats.

Q3: In 1991, for a short time, Iraq invaded Kuwait and seized its oil fields. During that time, what impact, if any, did the invasion have on Iraq's production possibilities frontier?

The production possibilities frontier shifted to the right.

T3: Why is there so much emphasis on education in the modern world?

There is so much emphasis on education in the modern world because it'll permit more efficient ways of production and economic growth to be created.

Test Review 1: How do opportunity costs shape economic decisions?

There will always have a trade-off in any decision. You'll have to give up an alternative in any decision.

Q1: Why are entrepreneurs important to the economy?

They promote economic growth.

T1: Why do entrepreneurs take the risk to start or expand a business?

They take risks as it allows them to distinguish themselves from their competitors.

Q2 Concept: Describe how people make decisions by thinking at the margin.

They'll consider the costs and the benefits of the opportunity. You must weigh the marginal costs against marginal benefits.

T1: Give two examples of needs and two examples of wants

Wants: car and big house Needs: food and shelter

Q1 Concept: How does scarcity affect the factors of production?

With scarcity, a good or service will remain scarce. If there is an unlimited want or need of a resource, the scarcity will continue.

Q3: Point b on the graph above represents

an underutilization of resources.

Q2: An opportunity cost is

the best alternative that is given up when a decision is made.

Q2: Because of scarcity, every decision involves a...

trade-off.

Test Review 1: Why is the role of the entrepreneur important?

Entrepreneurship is important as it has the ability to improve standards of living and create wealth, not only for entrepreneurs. but also for related business.

Q2 Concept: Identify why every decision involves trade-offs.

Every decision involves trade-offs because there are always alternative that we give up whenever we choose one thing or another.

Q1 Concept: Why are scarcity and choice the basis of economics in every society?

Every good or service has a limit to be reached and people have to decide what to choose based on their needs and want. Since all resources are scare, not everyone can have an endless supply of everything.

Q2: The phrase "guns or butter" expresses the idea that

government decisions involve trade-offs between military and domestic needs.

T2: Give an example of a "guns or butter" trade-off your school or local government might have to make. Describe the issues on each side of the debate.

An example of a "guns or butter" trade-off is the government deciding to either repave the roads or organize a festival. Although it will raise morale, choosing to organize a festival will neglect the maintenance and repair that needs to be done to the roads. Thus, creating traffic and problems overall. However, only fixing the roads, will cause a general disapproval of the government due to the lack of community events.

Test Review 1: How do goods differ from services?

Goods are material items that the customers are ready to purchase for a price. Service are the amenities, benefits, or facilities provided by the other person.

T3: Suppose that a country has the resources to produce 3 million cars and 100 millions tons of iron ore every year. Why is it a problem if the country produces 2 millions cars and 75 millions tons of iron ore one year?

It is a problem because the country is not utilizing their resources for maximum production. They are missing out on 1 million cars and 25 millions tons of iron ore that they are able to produce.

Test Review 1: Why is efficiency an important economic goal?

It is important because it implies an economic state in which every resources is optimally allocated to serve each individual or entity in the best way while minimizing waste and efficiency.

T1: If increasing physical capital increases productivity, why would a company not buy newer, faster computers for all its workers every year.

It would be an unnecessary purchase, especially if the current computers are still working efficiently.

T3: Explain how the law of increasing cost would apply in Capeland if the country decided to direct more resources into making shoes than into growing watermelons.

Law of increasing cost would apply in Capeland because the majority of their resources would be devoted to producing shoes, resulting in less resources for the growing watermelons. This will make it cost more to produce them.

Q2: What are economists referring to when they say "choosing is refusing"?

Opportunity cost

Q2:A basketball coach is performing a cost/benefit analysis in order to determine if more hours of practice would help the team score more points. The coach's action is an example of

marginal thinking