PreAP Economics and Choice Test Flashcards Preview

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Flashcards in PreAP Economics and Choice Test Deck (20):
1

What is economics?

the study of how individuals and societies satisfy their unlimited wants and limited resources.

2

What is the difference between a need and a want?

-Needs are things needed for survival (food, water, clothing, shelter)
-Wants are desires that can be satisfied by consuming a good or service.

3

What is the difference between a good and a service?

-Goods are physical products businesses produce. (scissors, brush, TV)
-Services are activities performed that satisfy people's wants or needs. (hairdresser, teacher, mechanic)

4

What is the difference between a producer and a consumer?

-a Producer is one who makes goods or provides services. (hairdresser, teacher, TV company)
-a Consumer is one who purchases goods or services.

5

what is scarcity?

the result of an inability to satisfy unlimited wants with limited resources.
-fundamental and ongoing tension that confronts individuals, businesses, governments and societies

6

What does it take to be a successful entrepreneur?

a combination of vision, skill, ingenuity and willingness to take risks that is needed to create and run a new business.

7

What 3 questions must society ask when faced with scarcity?

1. What is being produced?
2. How will it be produced?
3. For whom will it be produced?

8

What are the 5 steps in the PACED decision making model?

P- define the Problem
A-list the Alternatives
C-detirmine the Criteria
E-Evaluate the alternatives
D-make the Decision

9

What is an opportunity cost?

the best alternative given up when making a choice

10

What are trade offs and incentives?

trade offs- a choice that involves giving up some of one thing to have more of another
incentives- the reasons for increasing profit, interest, wages and rent.

11

What is the Production Possibilities Curve?

a graph that shows the impact of scarcity on an economy.

12

What does a point on the curve represent?

the best use of resources

13

What does a point inside the curve represent?

a possible use of resources

14

What does a point outside the curve represent?

an IMpossible use of resources

15

What is the most important factor in making an economic decision?

opportunity cost

16

What are the 4 factors of production?

Human, Capital, Natural and Entreprunial Resources

17

Describe Human resources

-workers
-includes time, effort, and talent that go into making products or services

18

Describe Capital Resources

-all resources made and used by people to produce and distribute goods and services
-includes tools, machinery, offices, warehouses, roads, factories, etc. (man-made)
-money is not a capital resource

19

Describe Natural Resources.

-all natural resources found on or under ground that are used to produce goods or services.
-includes water, forests. wildlife, minerals, gas, oil, etc.

20

Describe Entrepreneurial Resources.

a combination of vision, skill, ingenuity and willingness to take risks that is needed to create and run a new business.