PreAP Economics and Choice Test Flashcards

1
Q

What is economics?

A

the study of how individuals and societies satisfy their unlimited wants and limited resources.

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2
Q

What is the difference between a need and a want?

A
  • Needs are things needed for survival (food, water, clothing, shelter)
  • Wants are desires that can be satisfied by consuming a good or service.
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3
Q

What is the difference between a good and a service?

A
  • Goods are physical products businesses produce. (scissors, brush, TV)
  • Services are activities performed that satisfy people’s wants or needs. (hairdresser, teacher, mechanic)
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4
Q

What is the difference between a producer and a consumer?

A
  • a Producer is one who makes goods or provides services. (hairdresser, teacher, TV company)
  • a Consumer is one who purchases goods or services.
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5
Q

what is scarcity?

A

the result of an inability to satisfy unlimited wants with limited resources.
-fundamental and ongoing tension that confronts individuals, businesses, governments and societies

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6
Q

What does it take to be a successful entrepreneur?

A

a combination of vision, skill, ingenuity and willingness to take risks that is needed to create and run a new business.

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7
Q

What 3 questions must society ask when faced with scarcity?

A
  1. What is being produced?
  2. How will it be produced?
  3. For whom will it be produced?
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8
Q

What are the 5 steps in the PACED decision making model?

A
P- define the Problem
A-list the Alternatives
C-detirmine the Criteria
E-Evaluate the alternatives
D-make the Decision
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9
Q

What is an opportunity cost?

A

the best alternative given up when making a choice

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10
Q

What are trade offs and incentives?

A

trade offs- a choice that involves giving up some of one thing to have more of another
incentives- the reasons for increasing profit, interest, wages and rent.

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11
Q

What is the Production Possibilities Curve?

A

a graph that shows the impact of scarcity on an economy.

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12
Q

What does a point on the curve represent?

A

the best use of resources

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13
Q

What does a point inside the curve represent?

A

a possible use of resources

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14
Q

What does a point outside the curve represent?

A

an IMpossible use of resources

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15
Q

What is the most important factor in making an economic decision?

A

opportunity cost

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16
Q

What are the 4 factors of production?

A

Human, Capital, Natural and Entreprunial Resources

17
Q

Describe Human resources

A
  • workers

- includes time, effort, and talent that go into making products or services

18
Q

Describe Capital Resources

A
  • all resources made and used by people to produce and distribute goods and services
  • includes tools, machinery, offices, warehouses, roads, factories, etc. (man-made)
  • money is not a capital resource
19
Q

Describe Natural Resources.

A
  • all natural resources found on or under ground that are used to produce goods or services.
  • includes water, forests. wildlife, minerals, gas, oil, etc.
20
Q

Describe Entrepreneurial Resources.

A

a combination of vision, skill, ingenuity and willingness to take risks that is needed to create and run a new business.