Introduction to
Economics
Quiz 3
Review!!
This is something
essential for survival.
This is something
essential for survival.
Need
The level of a country’s
economic prosperity
The level of a country’s
economic prosperity
Standard of Living
The structure of methods
and principles that a
society uses to produce &
distribute goods &
services.
The structure of methods
and principles that a
society uses to produce &
distribute goods &
services.
Economic system
The idea that there are
limited resources
available to satisfy our
unlimited wants…occurs
in nature.
The idea that there are
limited resources
available to satisfy our
unlimited wants…occurs
in nature.
Scarcity
The process of bringing
new methods or products
or ideas into use.
The process of bringing
new methods or products
or ideas into use.
Innovation
What is guns and butter?
What is guns and butter?
The decision every
government must make
regarding allocating
resources to defense or
domestic goods.
What are the three key
economic questions?
What are the three key
economic questions?
What does a society
produce, How do they
combine the factors of
production, who gets to
consume the different
choices
The income people
derive for supplying
factors of production,
like land, labor or capital
The income people
derive for supplying
factors of production,
like land, labor or capital
Factor payments
What are trade offs?
What are trade offs?
Giving up one choice for
another, possibly more
desirable choice. Study
time vs. Play time.
What are the 3 factors of
production?
What are the 3 factors of
production?
Land (natural resources),
labor (effort by people)
and capital (money, manmade goods or
knowledge to produce
somethings)
Organizations that use
resources to produce a
product or service, which
it then sells.
Organizations that use
resources to produce a
product or service, which
it then sells.
Firms (also referred to as
business firms)
What are the benefits of
having capital?
What are the benefits of
having capital?
Having extra time to get
things done, more
knowledge of what
you’re doing, and
increasing your
productivity.
A snowstorm can cause
this…
A snowstorm can cause
this…
A shortage, because we
did not plan well enough,
we’re running out of stuff
to eat.
The amount of money a
business receives in
excess of expenses, it’s
the reward for taking the
risk and starting a
business.
The amount of money a
business receives in
excess of expenses, it’s
the reward for taking the
risk and starting a
business.
Profit
These are the actions and
services that one person
provides for another, like
being a butler or caddy
These are the actions and
services that one person
provides for another, like
being a butler or caddy
Services
What are consumer
goods?
What are consumer
goods?
Nonmilitary goods,
usually bought by
regular consumers.
A person or group of
persons living n a single
residence…frat houses
don’t count, nor do jail
cells or prisons.
A person or group of
persons living n a single
residence…frat houses
don’t count, nor do jail
cells or prisons.
Households
What’s Thinking at the
Margin?
What’s Thinking at the
Margin?
When you make
decisions that involve
adding or subtracting
one unit or one dollar.
This involves comparing
the costs and benefits of
certain choices the
government or business
makes.
This involves comparing
the costs and benefits of
certain choices the
government or business
makes.
Cost benefit analysis
What is a production
possibilities Curve?
What is a production
possibilities Curve?
A graph that shows
alternative ways to use
an economy’s productive
resources.
Any arrangement that
allows buyers and sellers
to exchange things, like
Craig’s List, a vending
machine…
Any arrangement that
allows buyers and sellers
to exchange things, like
Craig’s List, a vending
machine…
A market
What is capital?
What is capital?
Any man-made resource
that is used to produce
other goods and services,
can include physical
capital (man-made stuff)
or human capital
(knowledge and training)
Where you can purchase
or rent land, hire
workers, borrow money
to purchase capital. The
want ads would be an
example.
Where you can purchase
or rent land, hire
workers, borrow money
to purchase capital. The
want ads would be an
example.
Factor Market
What are the resources
need to supply all the
goods and services
called?
What are the resources
need to supply all the
goods and services
called?
The factors of production
The area where
households buy the
goods & services the
firms produce.
The area where
households buy the
goods & services the
firms produce.
Product Market
What are the five economic
goals of society, maybe not
all the societies, but at least
for ours, usually.
What are the five economic
goals of society, maybe not
all the societies, but at least
for ours, usually.
Economically efficient,
wide range of economic
freedom, security in our
economic endeavors, fair
for all consumers and
households, and steady
growth would be nice.
What’s economics?
What’s economics?
The study of how we, as a
society and as
individuals satisfy our
unlimited wants with our
limited resources.
The End
That’s it.