Chapter 1 Flashcards
Test questions to know
What is a need? Give an example.
Required for survival.
Examples: Food, medicine, water, shelter
What is a want? Give an example.
Desired, but not needed for survival.
Examples: Nintendo Switch, fancy earrings, new shoes
What is scarcity?
There are limited resources to meet unlimited wants. Scarcity is present at all times.
What is a shortage?
A shortage is when producers can’t or won’t offer goods at the current price.
Shortages are temporary, and are at the mercy of the producers.
What are the factors of production?
The resources used to make goods and services.
Land - All of the resources used to make the goods and services.
Labor - The effort that a person or people put into a particular task.
Capital - Can be physical or human.
Physical capital is human made objects used to create other goods and services, which helps save time and money.
Human capital is the knowledge and skills workers gain through education and experience. As human capital goes up, the country becomes more efficient and productive.
What are the different types of decision making when businesses are thinking at the margin?
How to use the land, labor and capital at their disposal
Countries have to decide what goods and services they will provide and focus on
Employers need to decide how many workers to hire or when to release workers
Legislators decide on government programs to start up
What is efficiency?
If a country is efficient, then it is using the resources in the best way to maximize output. If a country is more efficient, this leads to growth in the economy.
How does technology affect the economy?
Technology is a resource that businesses can use to become more efficient by cutting down on costs.
