ECONOMICS QUESTIONS AND GRADED ANSWERS, 100%
GUARANTEE
needs - things you require
want - things you would like to have
goods - tangible products that we use to satisfy our wants and needs
services - actions or activities that one person performs for another
scarcity - needs and wants are unlimited but resources are limited (this is the basic
economic problem)
trade-off - having to make a decision because of scarcity
opportunity cost - what is NOT chosen in a decision
4 factors of production - land, labor, capital, and entrepreneurs
land - resources found on the earth
labor - Human effort directed toward producing goods and services
physical capital - all human-made goods that are used to produce other goods and
services; tools and buildings
, human capital - the skills and knowledge gained by a worker through education and
experience
entrepreneurs - people who decide how to combine the other factors of production to
create new goods and services
productivity - degree to which resources are used efficiently
underutilization - the condition in which economic resources are not being used to their
full potential
law of diminishing return - at a point, adding more resources will decrease production
incentive - reward offered to persuade people to make certain economic decisions
fixed cost - do not change (ex. rent, mortgage, loan payment)
variable cost - changes based on production (ex. electric bills, wages, materials)
total costs - fixed + variable
marginal cost - cost to add one more unit
marginal revenue - additional revenue from one more unit
cost-benefit analysis - economic model that compares the marginal costs and marginal
benefits of a decision
GUARANTEE
needs - things you require
want - things you would like to have
goods - tangible products that we use to satisfy our wants and needs
services - actions or activities that one person performs for another
scarcity - needs and wants are unlimited but resources are limited (this is the basic
economic problem)
trade-off - having to make a decision because of scarcity
opportunity cost - what is NOT chosen in a decision
4 factors of production - land, labor, capital, and entrepreneurs
land - resources found on the earth
labor - Human effort directed toward producing goods and services
physical capital - all human-made goods that are used to produce other goods and
services; tools and buildings
, human capital - the skills and knowledge gained by a worker through education and
experience
entrepreneurs - people who decide how to combine the other factors of production to
create new goods and services
productivity - degree to which resources are used efficiently
underutilization - the condition in which economic resources are not being used to their
full potential
law of diminishing return - at a point, adding more resources will decrease production
incentive - reward offered to persuade people to make certain economic decisions
fixed cost - do not change (ex. rent, mortgage, loan payment)
variable cost - changes based on production (ex. electric bills, wages, materials)
total costs - fixed + variable
marginal cost - cost to add one more unit
marginal revenue - additional revenue from one more unit
cost-benefit analysis - economic model that compares the marginal costs and marginal
benefits of a decision
