Economics CH 1 Latest 2023 100% Pass

Economics CH 1 Latest 2023 100% Pass Wants Things that add comfort and pleasure to your life Needs Basic requirements for human survival Scarcity The state of lacking resources Economics The study of how people choose to use scarce resources to satisfy their wants. Goods Physical objects that can be purchased (like food, clothing, furniture,..etc). Services Work that one person performs for another for payment. Consumer A person how buys goods or services for personal use. Producer A person who makes goods or provides services. Factors of production Are the resources needed to produce goods and services. Land Refers to all natural resources used to produce goods and services. Labor The amount of effort used to produce goods and services Capital All the resources made and used by people to produce and distribute goods and services. Entrepreneurship The process of starting, organizing, managing, and assuming the responsibility for a business What is the relationship between wants and scarcity? The relationship between wants and scarcity is that scarcity occurs for the reason that there are not enough resources for meeting people's wants. What is the relationship between consumer and producer? The relationship between consumer and producer is that the producer is the one that creates and sells the products, which the consumer buys. And that the consumers have specific wants, which is what leads the producer to know what products to create that the consumer would buy. The relationship between factors of production and entrepreneurship? The relationship between factors of production and entrepreneurship is that entrepreneurship is one of the four factors of production. What is the difference between needs and wants? Explain how a need may also be a want. The difference between needs and wants is that needs are things ( like food, shelter,...etc) that are needed for survival. While wants are the things that bring us comfort and pleasure in our life. The way that wants may also be a need is that sometimes there is a situation when you want something, that at the same time you also need. For example, it is a hot day and you are thirsty so you want to drink something. And you drink water since you need it to survive. Because if you don't drink it you would die of dehydration. How does scarcity affect consumers? Producers? The way that scarcity affects consumers is that since consumers have unlimited wants they will try to buy all the goods that are available to them. Until the companies won't be able to produce the goods, which consumers won't be able to satisfy their wants. And the way that scarcity affects producers is that since there are limited resources to what they use for producing their goods, they will run out of goods to sell that will cause them to close their business. What services that individuals or businesses provide do you use every day? The services that individuals or businesses provide that I used every day is when I go to school everyday, so the money that is used for my education is what gives me knowledge. Describe how the owners of a computer repair store might use the four factors of production to run their business. Land-They would need to find how to get electricity in their store. And they would also need to find how to get water in their store. Labor-They would hire people that know a lot about computers, so they will be able to fix them. Capital-They decided to buy a place that would later be transformed as their store. They would contact other companies that sell computer parts or tools that they would use to fix the computers. Entrepreneurship -Had the idea of opening a store that fixes computers. Many high schools throughout the United States have faced a serious shortage of math and science teachers. Many prospective teachers choose to go into business and industry because of higher salaries. In some communities, businesses are "loaning" employees who want to teach part-time to schools to fill the math and science teacher gap. Does this scenario illustrate scarcity? Why or why not? It is a temporary shortage, so it is not scarcity. Since there are actually teachers that can teach but they just decide not to. If this situation had said that all the time they were lacking science and math teachers, that would have actually been scarcity. Consider the following entrepreneurs: Lucy, who runs an organic farm, and Ron, a sports superstar who owns several restaurants. Describe how they may have used entrepreneurship to establish and run their business. The way that Lucy and Ron may have used entrepreneurship to establish and run their own businesses is that first, they thought about wanting to have their own business ( organic farm and restaurants). Which lead them to the other 3 factors of production ( labor, capital, and land). So for land they will think of where they can get the resources they need to produce the goods or service that they are providing ( electricity, water,..ect). For labor they would think the type of people they need to hire in their business. And for capital they would think of where they will be having their business and the tools that they will need to buy from other companies to be able to produce the goods or services. And for them to be willing to take a risk that might make them lose all they money if the business doesn't succeed. Select a 10 minute period of time in your day to day life - when you are in the cafeteria at lunchtime, for example. Analyze how scarcity affects your activities during this time period. Write your analysis in a paragraph. The way that scarcity affects my activities during lunchtime is______. At one time or another, you have probably made a choice about how to use your scarce resources that you later regretted. For example, you may have purchased a music download instead of going to the movies. What led you to your choice? What did you learn later that might have led you to a different choice? Incentives Things that attract or lure people into action. Utility The capacity to be useful and provide satisfaction. Economize To make decisions according to the best combination of costs and benefits. Trade off The choice that people give up when they make choice. Opportunity cost Whatever must be given up to obtain some item. Cost benefit analysis A decision-making process in which you compare what you will sacrifice and gain by a specific action. Marginal cost The cost of producing one more unit of a product. Marginal benefit The additional satisfaction from using one more unit of a product. Self interest Taking care of yourself but not at the expense of others. Selfishness Satisfying your own needs at the expense of others What is the relationship between incentive and utility? The relationship between incentive and utility is that because of incentive, it lures the customer to buy the product in the way to believe that the product is useful and it provides satisfaction. What is the relationship between trade-off and opportunity cost? The relationship between trade off and opportunity cost is that the choice that they decide not to choose ( trade off) involves giving up what they could possibly gain from that action. What is the relationship between marginal cost and marginal benefit? The relationship between marginal cost and marginal benefit is that because of the extra cost that you would pay for another unit of the product ( marginal cost), you would be able to feel satisfaction for having an extra unit of a product that you can use. Two action movies are playing at your movie theatre complex. You have a half-price coupon for one. However, you choose to see the other. How might this still be an example of economizing? The way that this might still be an example of economizing is that even though you have a coupon that you decide on not using, which could save yourself some money. It might not be a movie that you want to watch, that would cause you to not have fun. But if you decide to watch the other movie, you would pay more but still have a great time since you wanted to watch it. Which could make it a greater choice than the half-price coupon. Think of some of the options you have for spending time after school--- sports practice, hobby clubs, work, or extra study, for example. Which option would you choose? What is the opportunity cost of your choice? The option that I would choose is the extra study. The opportunity cost of my choice is that for picking having more time studying, I would be giving up doing something that is way more fun and entertaining for me. How is a decision making grid an example of cost benefit analysis? The way that a decision making grid is an example of cost benefit analysis is because a decision making grid helps you know the pros and cons of the different options you have, to make the choice that is the most beneficial to you. Which is exactly what cost benefit analysis does. Use the concepts of marginal costs and marginal benefits to explain why some people might see the same movie ten times while others will watch it only once or twice. A website reviewing new CDs offers you a free subscription. All you have to do is complete a brief online application. What is the opportunity cost of this "free" offer? Why do you think this offer is being made? The opportunity cost of this "free" offer is that if I don't accept the "free" subscription, I will miss the opportunity to be able to read the reviews of the CDs for free. But if I do decide to accept it, the opportunity cost would be that I might regret my decision. For the reason that it wasn't worth it in the way that I am not able to read all the reviews without paying for premium. Explain how self-interest is part of each economic choice. Use an example from your own experience that shows how you purposely served your own interest in a choice you made. You are on a limited budget and planning a four-day camping trip to a national park. Bus fare is $75 each way and the ride takes 12 hours. Plane fare is $150 each way and the ride takes an hour and a half. Conduct a cost-beneficial analysis to help you choose your method of travel. Why are all choices economic choices? Illustrate your answer with an example. Economic model A simplified version of reality used to analyze real-world economic situations. Production possibilities curve A graph used by economists to show the impact of scarcity on an economy. Efficiency Producing the maximum amount of goods and services possible. Underutilization Producing fewer goods and services than possible. Law of increasing opportunity States that as production switches from one product to another, increasing amounts of resources are needed to increase production of the second product. Explain how each of these terms is illustrated by the production possibilities curve. ( underutilization & efficiency) On what assumption is the PPC based? Explain how this conditions do not correspond in the big world. What economic data does PPC bring together? Why do opportunity costs increase as you make more and more butter and fewer guns? Based on what we learn from PPCs, what does an economy need to be able to produce more of both products on the graph? Explain why, in an economy that produces only fish and computers working at efficiency, the 500th computer made will cost more in terms of fish than the 450th computer made. Suppose the owners of a car manufacturing company are thinking of entering the motorcycle production business. How would a PPC model help them make a decision? If new technology was introduced but there were not enough skilled workers to use it, where would the nation's production be plotted on the PPC- inside or out the curve? Explain your answer. During a war, a country suffers massive devastation of its industry. How would the country's PPC change from before the war and after the war? Sketch a PPC to illustrate your answer. Statistics Numerical data Microeconomics The study of the individual consumers. Macroeconomics The study of the whole economy. Positive economics Studies economic behaviors as it is. Normative economics Judgments of what economics ought to be. Explain the difference between statics/economic model. Explain the difference between macroeconomics/microeconomics. Explain the difference between positive economics/normal economics. Why do economists often choose to present statistics in charts, tables, or graphs? Create a simple model to explain how you decide how much time to study and how much time to unwind each evening. You may use words, charts, or graphs, or equations. Think of an example of a macroeconomic issue that affects an individual person, family, or business and explain its effects. Explain the value of statistics and other data to positive economics and to normative economics. How do you think politicians might use normative economics statement? In which category does each item below belong—microeconomics and macroeconomics? Why? a. Studying statistics to see how well the economy is doing at creating jobs or increasing exports; b. Studying statistics on gasoline sales and hotel bookings to explore the impact of higher gas prices on vacation plans Consider the example of the state of lottery to raise money for education. How might it be possible for two economists to see the same information and arrive at different opinions about what to do? When you go out shopping, do you often worry that there will be a shortage of something you really want? If so, explain why you think there will be a shortage. If not, explain why there seems to be enough of everything you would want to buy.