Unit 1

Question 1

What is scarcity?

Answer 1

how societies deal with limited resources and unlimited wants

Question 2

What are the factors of production?

Answer 2

Land, Labor, & capital

Question 3

What does the Productions Possibilities Frontier show?

Answer 3

The limit to an economic system, how much can we produce.

Question 4

What are Trade offs?

Answer 4

Decisions made by people or businesses.

Question 5

What is an opportunity cost?

Answer 5

What has to be given up when a decision is made.

Question 6

What is Fiscal Policy

Answer 6

Taxes & Government spending

Question 7

What is monetary policy

Answer 7

Interest Raates & money supply

Question 8

Draw the circular flow model

Question 9

What is the purpose of fiscal and monetary policy?

Answer 9

to increase spending In the product market

Question 10

What is absolute advantage?

Answer 10

When a country can produce more goods than another

Question 11

What is comparative advantage

Answer 11

When a country can produce more goods with the lowest opportunity cost, this is how you can be more efficient.