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Questions and Answers
What is an example of capital needed to start a tailoring or garment making business?
In comparison to the U.S. free enterprise system, what is a characteristic of the economy of China?
What term is used to describe the idea that resources are limited in economics?
Jenny wants to buy a computer and a new television before she leaves for college. She only has enough money to purchase the computer. Which of the following is the opportunity cost of purchasing the computer?
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What is a characteristic of the economy of China compared to the U.S. free enterprise system?
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What term is used to describe the concept of limited resources in economics?
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What is the opportunity cost of Jenny purchasing the computer?
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Study Notes
Capital for Tailoring Business
- Initial capital can include sewing machines, fabric, tools, and workspace.
- Additional expenses may cover licensing, marketing, and operating overhead.
Economy of China vs. U.S. Free Enterprise
- China's economy has a significant level of government control compared to the U.S. emphasis on free market principles.
- The Chinese model incorporates state-owned enterprises alongside private ownership.
Limited Resources in Economics
- The term "scarcity" describes the idea that resources available are limited compared to the demand for those resources.
Opportunity Cost
- Opportunity cost refers to the value of the next best alternative foregone when a choice is made.
- In Jenny's case, the opportunity cost of purchasing the computer is the value of the television she must forgo.
Additional Characteristic of China's Economy
- China's economy is characterized by a mix of capitalism and central planning, contrasting sharply with the U.S. system that promotes individual entrepreneurial freedom.
Reiteration of Limited Resources Term
- Scarcity is the economic term that encapsulates the concept of limited resources available for varied uses.
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Description
This quiz tests your understanding of opportunity cost and capital. In the first question, you'll need to identify the opportunity cost of purchasing a computer. In the second question, you'll be asked to identify the capital required to start a tai...
