unit one economics comprehension
Why are some countries rich and others poor
countries have different factors of production. The factors of production are land, labor, and capital. Land is resources that the country uses to produce goods and services. Countries have different resources and one country may be able to produce something that others cannot. For labor, some countries have a large unemployed population and there is not as large of a working class as other countries. Lastly, capital could include the advanced technology that some countries have. Some countries have oil that they are able to sell to other countries
What is the main focus if economics?
economics is the study of how people seek to satisfy their needs and wants by making choices. For example, what food to buy at the store is a choice people face often. people are forced to make these choices because of scarcity. Scarcity implies limited quantities of resources to meet unlimited wants.
shortage vs scarcity
scarcity implies the limited quantities of resources to provide unlimited amount of want. Shortage is when producers can't or will not offer goods or services at their current prices. Shortages could be short term or long term. Like on christmas, the popular toy may be in a shortage. Scarcity is always existent. Goods and services are scarce because they are always made from resources that are scarce.
What are economic incentives and how do people respond to them?
People respond to incentives when there is a reward or penalty influence. Speeding tickets are an example of negative incentives. However, perverse incentives are incentives that backfire.
How do resources affect a countries production possibilities frontier?
Production possibilities frontier is the line on a production possibilities graph that shows the maximum possible output. The amount of resources affects what the maximum output could be. There are not enough resources for an endless amount of goods due to scarcity. So, the PPF shows a trade-off of resources. Picking one dot on the line will mean there may be more of one good and elss of the other due to the amount of resources available. When selling paper, a production possibilities frontier would show how much paper can be sold with the amount of trees left that they can use
why do we complete a cost benefit analysis
a cost benefit analysis is also known as a decision making grid. it is used when the opportunity cost is unclear. The vertical columns say benefits, decisions, opportunity cost, benefits forgone. The row says alternatives. Considering the opportunity cost usually decides what choice will be made. Someone could use a cost benefit analysis to decide how many hours of studying to do
Evaluate and analyze how guns or butter is an example of a trade-off
A trade-off is an alternative that we sacrifice when making a decision. Guns or butter is an example of a society trade off. The government could choose to give more to guns, or military goods, but then the alternative we would lose is having more towards consumer goods.
Why would scarcity in choice most likely be basic economic problem for all people
Economics is about solving the problem of scarcity.
Why is being efficient beneficial to the economy?
Efficiency is using resources in such a way that as to maximize production output of goods and services. An economy working at its most efficient level is important to grow as an economy. For example, if a farm can afford to have 4 workers, why would it want to have 3 when there can be more work done with four and there's enough resources to pay four people.
Why is underutilization damaging to the economy?
Underutilization is using fewer resouces than an economy is capable of using. When this happens a country can lose money. During underutilization, a country does not produce as much as they could
What does an entrepreneur do in an economy, why are they known as a risk-taker, discuss their importance and give current examples
an entrepreneur is an ambitious who combines land, labor, and capital to create and market new goods and services. They take risks to develop new ideas, start businesses, create industries, and fuel economic growth. An example of an entrepreneur is Jeff Bezos, he is the owner of amazon.
What factors contribute to good economic decision making
benefits, decisions, opportunity cost, benefits forgone
why are guns and butter an opportunity cost?
guns or butter is an opportunity cost because guns means military goods and butter means consumer goods. there are not enough resources to have unlimited wants of each, so the government chooses to have more guns or more butter. By choosing more guns, the opportunity cost is having more consumer goods and by choosing butter the opportunity cost is having more military goods.