Module 1 Video/Slides

Question 1

Unlimited Wants vs Scarce Resources

Answer 1

Unlimited Wants: Food, Entertainment, Vacation, Clothing

Scarce Resources: Income, Time, Land, Energy

Question 2

What are marginal costs?

Answer 2

Marginal costs are the extra costs associated with one more unit of consumption. (Not just monetary)

Question 3

What are marginal benefits?

Answer 3

Marginal benefits are the extra benefits associated with one more unit of consumption. (Not just monetary)

Question 4

Capital is paid in…

Answer 4

Interest

Question 5

Economists believe that individuals and firms both make ________ choices.

Answer 5

rational

Rational as in making decisions that make you better off. As a consumer you want to be happy, so rationality says, you’ll make decisions that will make you happy.
Whereas, firms want to be profitable, so rationality says they’ll make decisions that make them more profitable.

Question 6

Rationality means that

Answer 6

you do things that get you closer to your goals

Question 7

Tradeoff

Answer 7

Choosing one thing and therefore limiting another possibility–required due to scarce resources. (If you can only afford one snack, ice cream or popcorn, you don’t get whatever you don’t choose.) (There’s always a benefit and a cost to every tradeoff or choice.)

Question 8

The choices we make are often created by some type of…

Answer 8

incentive. These can be positive or negative (the carrot or the stick). They can be personal, monetary, based on opportunities, or any number of other forms of incentives.

Question 9

It is common practice in economics to always put the price on the _______ axis and put the quantity on the __________ axis

Answer 9

Price on the vertical axis and quantity on the horizontal axis.

Question 10

The point where the axes intersect is called the

Answer 10

origin - It has a value of zero for each variable

Question 11

How do economists title their graphs about the quantity of demand vs the price of a good?

Answer 11

They title the graph with information on the good there talking about with the time frame (such as coffee per hour)

Question 12

Demand curve

Answer 12

A line on a graph that shows the quantity demanded at different prices.

Question 13

Curve

Answer 13

A term used for any line in a graph that shows a relationship between 2 variables. (It can still be a straight line as well-always called a curve).

Question 14

Downward sloping curve

Answer 14

The relationship between price and quantity is a negative or inverse relationship- as price goes down, quantity goes up-the two variables move in opposite directions.

Question 15

Positive or direct relationship

Answer 15

Both variables move in the same direction. (Ex: When quantity increases, cost increases. When quantity decreases, costs decrease.)

Question 16

A’

Answer 16

A prime - Primes are used to create a second curve on a graph when factors other than the variables on the graph change in order to make a new curve necessary (such as the weather changing the quantity demanded at each price).

Question 17

A shift in a curve implies that…

Answer 17

new values of one variable and each value of the other variable (such as a new quantity at each price when an item is more in season-hot chocolate in winter or ice cream in summer).

Question 18

Movement along a curve

Answer 18

A change from one point on a curve to another that occurs when one of the variable on the axis change (like price changing)

Question 19

A new curve is necessary when…

Answer 19

Something other than the variables on each axis changes (like season or a pandemic changing the quantity demanded at certain prices)