Unit 1 Introduction to Economics.pdf

Economics Student Worksheet Unit 1: Introduction to Economics Name: _________________________________________ Class: _________ Date: _______ Lesson 1: What is Economics? Explain the following economic concepts: 1. Scarcity: Scarcity is the problem of having limited resources with unlimited wants a...

Economics Student Worksheet Unit 1: Introduction to Economics Name: _________________________________________ Class: _________ Date: _______ Lesson 1: What is Economics? Explain the following economic concepts: 1. Scarcity: Scarcity is the problem of having limited resources with unlimited wants and needs. ________________________________________________________________________ ________________________________________________________________________ 2. Choice: Choice is deciding how we’re going to use our limited resources, such as money or time, to satisfy our wants and needs.________________________________________ ________________________________________________________________________ 3. Rational Self-Interest: When people make sensible choices based on what is best for them. ________________________________________________________________________ ________________________________________________________________________ 4. What is economics? The study of how people, when faced with scarcity make rational self-interest choices in using limited resources to satisfy wants and needs_______________ ____________________________________________________________________ Page 1 of 4 Copyright © 2021 Applied Educational Systems Economics Student Worksheet Unit 1: Introduction to Economics Name: _________________________________________ Class: _________ Date: _______ Lesson 2: Money and Prices 1. Why did people start using money? People started using objects, or money, as an easier way of exchanging goods and services than bartering._______________ 2. What were some early forms of money? shells, barley,and precious metals 3. Explain the three functions of money? a) Medium of exchange – Money is used as a medium of exchange when people trade it for a product.____________________________________ b) Unit of accounting – Money is used as a unit of accounting when people use it to compare the value of products._________________ c) Store of value – Money is used as a store of value when people save money for future spending. By using money as a store of value, you can to increase his future purchasing power._________ 4. How does product pricing affect consumer choice and a business? If the prices are too high, customers will likely go to another store. If the prices are too low, a business might sell lots of product but won’t make a profit. In either case the business will eventually close. Page 2 of 4 Copyright © 2021 Applied Educational Systems Economics Student Worksheet Unit 1: Introduction to Economics Name: _________________________________________ Class: _________ Date: _______ Lesson 3: Markets 1. What is a market? Places where people exchange products_________________ ________________________________________________________________________ 2. Who are the two main players in a market? Sellers and buyers__________________ ________________________________________________________________________ 3. How does competition among sellers affect prices? It decreases a product’s price 4. How does competition among buyers affect prices? It increases a product’s price 5. What are the three basic market structures? Pure competition, oligopoly and monopoly______________________________________________________________ 6. Describe the structure of a pure competition market: There are many buyers and sellers, products in the market are similar, buyers are familiar with the products and there is easy entry and exit in the market. 7. What is an advantage of a pure competition market? It is best for buyers because there is pressure on sellers to provide better products and service to keep customers 8. Describe the structure of a monopoly market: It has one seller with complete control over the price and supply of the product in the market 9. What is an advantage of a monopoly for a seller? The one seller has control of the price of the product and can always make a good profit. 10. Describe the structure of an oligopoly market: Page 3 of 4 Copyright © 2021 Applied Educational Systems Economics Student Worksheet Unit 1: Introduction to Economics Name: _________________________________________ Class: _________ Date: _______ A few sellers providing similar products, there are barriers to market entry, and action by one seller usually influences all sellers. 11. What are the results of barriers to market entry? Market barriers reduce competition and generally results in higher product prices. Page 4 of 4 Copyright © 2021 Applied Educational Systems