Unit 1

Question 1

What is Econ?

Answer 1

The study of behaviour and incentives

Question 2

What are incentives?

Answer 2

Described as a reward that encourages an action

Question 3

What do incentives do?

Answer 3

They encourage people to work harder, be more productive, and make certain choices

Question 4

What is microeconomics?

Answer 4

The study of choices that individuals and businesses makes, the way these choices interact in markets, and the influence of governments

Question 5

What is an example of microeconomics?

Answer 5

How producers decide what they want to produce, how to price, and when to exit markets

Question 6

What is macroeconomics?

Answer 6

Studies the economy as a whole, including factors like GDP - how much stuff we made as a country in a given year

Question 7

What is an example of macroeconomics?

Answer 7

How many cars are produced in a country, how much people spend on toys, or how government decisions impact jobs and prices

Question 8

What is scarcity?

Answer 8

Having a limited supply of resources to meet the needs and wants of society

Question 9

What are goods and services?

Answer 9

Objects that people value and produce to satisfy wants

Question 10

What are the four factors of production?

Answer 10

Land, labor, capital, entrepreneurship

Question 11

1. Land

Answer 11

Includes things we get from nature like soil, agriculture, etc

Question 12

2. Labor

Answer 12

People who work to make things happen, like farmers

Question 13

3. Capital

Answer 13

Tools and machines we use to make stuff, like tractors on farms or sewing machines in factories

Question 14

4. Entreprenuership

Answer 14

This is when someone comes up w/ ideas, takes risks to make stuff happen, like starting a business

Question 15

People who own land get money called…

Answer 15

Rent

Question 16

People who work get money called ‘blank’ for their time and effort

Answer 16

Wages

Question 17

If someone owns tools or machines used in production, and they let others use them…

Answer 17

Interest

Question 18

People who are entrepreneurs get money called…

Answer 18

Profit

Question 19

What is a choice?

Answer 19

Every decision means picking one thing and giving up another, while weighing the pros and cons

Question 20

What is an opportunity cost?

Answer 20

What you sacrifice by choosing one option over the other. Basically choosing the next best option

Question 21

What is a rational choice?

Answer 21

People usually make choices that they think will benefit them the most, based on what they know

Question 22

What is marginal?

Answer 22

Focusing on the smaller, incremental changes of something. Cost of making one more item

Question 23

What is marginal benefit?

Answer 23

The benefit from consuming or producing one more unit of a good service

Question 24

What is marginal cost?

Answer 24

The extra cost of making or using one more unit of something

Question 25

What are incentives?

Answer 25

A reward that encourages an action

Question 26

Simplified models of real situations focus on important details and ignore the small stuff

Answer 26

Economic models

Question 27

What are the three fundamental economic questions every society must answer?

Answer 27

• WHAT goods and services are we producing?
• HOW do we make those goods and services?
• WHO are we producing the goods and services for?

Question 28

What is self-interest?

Answer 28

People or companies acting to benefit themselves without worrying about others

Question 29

What is social interest?

Answer 29

Actions or policies that are good for everyone, not just certain individuals or groups

Question 30

What are consumer choices?

Answer 30

Decisions people make about what to buy, based on preferences, budget constraint, and prices

Question 31

What is a budget constraint?

Answer 31

It’s when people can only spend as much as they earn, restricting their ability to purchase goods and services

Question 32

How do economic models help us predict consumer behaviour?

Answer 32

Simplifying real-life situations, focusing on factors like prices, incomes, preferences, and constraints