Economics Unit 1 Flashcards

Questions and Answers

What does it mean to allocate?

To distribute something among those who need or want it.

What is a non-renewable resource?

A resource that, once used, is no longer available.

What is a renewable resource?

A resource that can be replenished after use.

What is scarcity?

The idea that all resources are limited and insufficient to meet unlimited wants and needs. Signup and view all the answers

What does value refer to in economics?

The worth of an item in consideration with goods, services, or money. Signup and view all the answers

What helps businesses allocate resources for their best and most productive uses?

Value Signup and view all the answers

The more __________ a resource, the more costly it will be.

scarce Signup and view all the answers

A manufacturer that requires scarce and costly resources is likely to charge __________ for its products.

more Signup and view all the answers

Which of these statements demonstrate the economic concept of scarcity? (Check all that apply)

The wants and needs of people are unlimited. Signup and view all the answers

Which of the following is an example of a capital resource?

Machinery Signup and view all the answers

Failure to address the three questions of economics will have what kind of impact on an economy?

It will have negative consequences. Signup and view all the answers

One of the three economic questions deals with deciding?

What goods and services should be produced. Signup and view all the answers

If a specific economy has extra capital resources available, it will?

be able to produce more goods and services needed and wanted by society. Signup and view all the answers

The three questions of economics BEST help in making decisions about __________.

production Signup and view all the answers

Zahara is wondering how she will be able to afford her monthly TV streaming services, water bill, groceries, and cell phone bill. What economic concept concerns Zahara?

Economic needs and wants Signup and view all the answers

Which of the following BEST illustrates deciding how to produce a specific product?

Should we produce jeans with expensive machinery or less expensive labor? Signup and view all the answers

A thrifty shopper wants to purchase a new phone that is made with quality parts. What factors should they consider?

High quality phones contain rare earth metals that are a more scarce resource and cost more to the consumer. Signup and view all the answers

What does the concept of scarcity explain? (Check all that apply)

Why a single resource has more value than other resources. Signup and view all the answers

Wind and solar energy are examples of?

renewable resources. Signup and view all the answers

How would a manufacturer benefit by using fewer scarce resources?

The product would be less expensive to produce. Signup and view all the answers

Which statement BEST describes the impact of scarcity?

Consumers must pay higher prices for many items. Signup and view all the answers

A basic concept of economics is that all resources are?

scarce. Signup and view all the answers

How does scarcity determine the economic value of an item?

By the amount of goods that are produced. Signup and view all the answers

What is opportunity cost?

The principle that one opportunity must be given up in order to consume or produce another. Signup and view all the answers

What is production cost?

The total amount needed to produce a good or service. Signup and view all the answers

What is the production possibility curve?

A representation of the combination of goods and services that can be produced in a situation. Signup and view all the answers

What is profit?

Income received from an economic action, minus the costs of taking the action. Signup and view all the answers

What is revenue?

The total income from an economic action. Signup and view all the answers

Which statements demonstrate the meaning of opportunity cost for producers and consumers? (Check all that apply)

When deciding to produce or purchase one item, another opportunity must be given up. Signup and view all the answers

Look at the equation framework. __ = - _ Which of the following lists the proper placement of terms, from left to right, to complete the equation?

Profit = Revenue - Production Cost Signup and view all the answers

Assessing opportunity cost involves?

making choices and dealing with consequences. Signup and view all the answers

What is a graphical representation of the combination of goods and services that can be produced in a situation?

Production Possibility Curve Signup and view all the answers

Demonstrating opportunity cost is done through production?

possibility. Signup and view all the answers

Rescooperate Ice Cream Shop recently analyzed their books. They found that in the past year, they made $100,000 selling ice cream and spent $75,000 on supplies and factory space. The remaining $25,000 represents?

profit. Signup and view all the answers

Opportunity cost occurs because of a producer's need to?

allocate resources. Signup and view all the answers

Which of the following are examples of limited resources on the part of consumers?

Time and Money Signup and view all the answers

Which of the following illustrates an opportunity cost?

Amir only has time to study or to play basketball. Signup and view all the answers

How does a production possibility chart assist in outlining opportunity cost?

It compares production numbers of one product to another. Signup and view all the answers

On a production possibility curve, data points that fall outside of the curve represent?

a currently unattainable production. Signup and view all the answers

One method for studying opportunity cost is to think in terms of?

trade-offs. Signup and view all the answers

Read the following scenario: A clothing company wants to expand into new regions. It is looking at an urban area with a large number of vacant warehouses. The population is made up of people with average educations and a lower standard of living. The company is experiencing slower sales but has hopes that the product will take off and be successful. Which of the factors of production will the company need to address MOST closely when making its decision to expand?

land Signup and view all the answers

What restriction would the government impose in a closed economy?

The government would prohibit trade with other nations. Signup and view all the answers

What are the pros of a mixed market economy for most citizens? (Check all that apply)

The economic system works to promote equality. Signup and view all the answers

The goal of a command economy is to?

create equality within a society. Signup and view all the answers

What is one way a command economy affects the lives of private citizens?

Citizens cannot make most economic decisions. Signup and view all the answers

In a communist command economy, workers are employed by?

the state. Signup and view all the answers

How does the government of a republic typically shape its economy?

The government allows citizens to own private businesses. Signup and view all the answers

Study Notes

Key Economic Terms

Allocate: Distribution of resources among those who need or want them.
Non-Renewable Resource: A resource that becomes unavailable once used.
Renewable Resource: A resource that can be replenished after utilization.
Scarcity: Concept that resources are limited while wants and needs are unlimited.
Value: The worth of an item relative to goods, services, or money.

Economic Principles and Concepts

Opportunity Cost: The principle that consuming or producing one item means forgoing another opportunity.
Production Cost: Total expenses incurred in the production of a good or service.
Production Possibility Curve: A visual representation of the various combinations of goods and services that can be produced with available resources.

Economic Decision-Making

Businesses allocate resources effectively to maximize productivity and profit.
Scarcity influences resource pricing — the scarcer the resource, the higher the cost.
Failure to consider economic questions can lead to negative impacts on the economy.

Economic Questions

Key economic questions revolve around:
- What goods and services should be produced?
- Who decides on the allocation and distribution of these goods?
- How are they produced and delivered to consumers?

Market Structures and Economic Systems

Mixed market economies balance government intervention and free market dynamics, offering personal choice and entrepreneurship.
Command economies centralize control, limiting individual economic decision-making.

Consumers and Producers

Consumers face limitations dictated by resources, needing to make choices that reflect their wants and needs.
Producers choose what to manufacture based on resource availability and potential profit.
The relationship between scarce resources and economic value is crucial; scarcity often drives higher demand and prices.

External Economic Influences

Government policies, such as trade restrictions or ownership laws, can significantly affect the economy.
Economic conditions often dictate the available opportunities for wealth creation and general economic mobility for individuals.

Importance of Resource Allocation

Efficient resource use is necessary for the production of goods and services that satisfy societal needs and wants.
Understanding opportunity costs and assessing production possibilities are vital for strategic economic planning.

Economic Performance Indicators

Profit is the income remaining after costs are deducted, crucial for business sustainability.
Revenue refers to total earnings before costs, influencing decisions on expansion and hiring.

Graphical Representations in Economics

The Production Possibility Curve allows for analysis of trade-offs between different products and services, indicating efficiency or inefficiency in production.

Conclusion

Economic theories and principles guide both individuals and businesses in making informed choices in the face of scarcity, ensuring optimal resource allocation and value creation in society.

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Description

Test your knowledge on the fundamentals of economics with these flashcards covering key terms and definitions. Learn about concepts such as resource allocation, scarcity, and the differences between renewable and non-renewable resources.