Name ________________
CONSUMER EDUCATION
Points _____ /10
ECONOMICS – UNIT 1
3 Factors of production
1. ______________ or ________________ Resources
2. ______________ or ________________ Resources
3. ______________: money or items of ___________
- All of these resources are ____________.
-This creates the basic economic problem: _______________. As ____________our wants are ___________ while
the resources to satisfy those wants are __________.
Opportunity Cost: the cost of the next best ______________ when making a choice or purchase.
-There is an opportunity cost in every ___________ made as consumers and citizens.
-Examples:

A person who has $15 can either buy a CD or a shirt. If he buys the shirt the opportunity cost is the
_______ and if he buys the CD the opportunity cost is the ________. If there are more choices than two,
the opportunity cost is still only one item, never all of them.

A person who decides to quit their job and go back to school to increase their future earning potential has
an ______________ ________ equal to their lost ______ for the period of time they are in school.
Conversely, if they _________ to remain employed and not return to school then the opportunity cost of
that action is the _______ potential _______ increase.
-Examples:
1.
2.
Economic Systems
-Three basic economic questions: _______ to produce, ________ to produce it, and _______ gets what is
produced.
-how these questions are answered determine the type of economic system
Traditional Economy:
-Examples:
1
Command Economy:
-associated with _____________ or ______________ political systems
-Incentive for workers or entrepreneurs?
Capitalism Stinks Tshirts: $19.95!
-Examples:
_____________ or Market Economy:
-The purpose of businesses under a market economy is to earn a ______________.
-Examples:
Mixed Economy
-Show below under each heading examples of how U.S. is mixed:
Command
Market
Supply & Demand
Demand is the _______________ and _______________ to buy a product at various
prices during a given time period. Law of Demand, as prices ______ quantity
demanded will ____________, ceteris paribus.
Supply is the quantity of a product that suppliers are _______________ and
_______________ to produce at various prices during a given time period. Law of
Supply: as prices ______________ quantity supplied will_____________, ______________ _____________.
In order for products to stay on the market consumers have to buy them, giving the product their dollar _______.
Competition is good/bad for consumers, as it generally lowers _________ and improves product _____________.
Two illegal forms of competition are: _______- ____________ and ___________________.
Equilibrium Price: ___________ at which the quantity supplied exactly equals the quantity ___________ of that
product.
Scarcity: When quantity ____________ exceeds the quantity ______________. Generally results in a(n)
___________ in prices.
-Examples: Strawberries are scarce during certain season because they only grow at certain times. Other items
derive all or most of their value from their scarcity, such as:________________________________.
Surplus: When quantity __________ exceeds the quantity __________. Generally results in a(n) ___________ in
prices.
-Example:
2
EXTRA ECON INFO (complete for extra credit if you wish)
-What does the government do to help control surpluses?
In a competitive market, ________ will function to equalize the quantity _______________ by consumers, and the
quantity supplied by ________________, resulting in an economic __________________ of price and quantity.
Law of Diminishing Marginal Utility: the more often an item is used the utility level is lowered.
-examples
-examples where this isn’t true:
-Utility refers to ______________ from a product or something you can utilize
Substitute Good: product that can replace another product, generally a competing brand.
-Examples:
1.
2.
3.
Complementary Good: product that is linked with another product.
-Examples:
1.
2.
3.
Shift in the Supply Curve:
-Example: assume that someone invents a better way of growing wheat so
that the cost of growing a given quantity of wheat ___________. Otherwise
stated, producers will be willing to supply more wheat at every price and this
shifts the supply curve S1 outward, to S2—an increase in _____________.
-Examples
1.
2.
3
Shift in the Demand Curve
Quantity demanded increases at all price levels. The increase in demand could
come from changing tastes and fashions, incomes, price changes in
complementary and substitute goods, market expectations, and number of
buyers.
-Example: Suppose new research reveals a certain ingredient in PowerAde
drinks is linked to cystic fibrosis. This will cause a(n)____________ in the
quantity demanded for Gatorade and a decrease for ___________.
-Examples
1.
2.
Elasticity of Demand: is a measure used to show the responsiveness, or elasticity, of the quantity _____________
of a good or service to a change in its _________.
Ex: If the price of oil spikes up how will this affect demand? Why or Why not?
-This shows that gas is mostly a(n)___________________ product.
-Examples of other inelastic products:
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Name ________________
Points ______ / 10
GREED VIDEO
Answer all questions thoroughly to receive full credit.
1. What is a “zero-sum game?”
2. Many times both the buyer and seller say “thank you.” Why is this?
-What does this have to do with products that are scams? Microsoft and Bill Gates?
3. Explain what happens with the money in the jar and people grabbing for it.
4. Explain the lifeguarding company example. Do you agree or disagree that they are better? Why?
5. Explain the process of how the Steak gets to the market and all the people involved. What is the point of
showing this concept in the video?
6. What happened to several of the intercity kids from the high school business classroom? What does this show
about the relationship between poverty and capitalism?
7. What does T.J. Rogers do? What is his argument about spending money and greed?
8. Who is Michael Milkin and is he good or bad in your opinion? Is he better than Mother Teresa?
-What is the central argument at stake here?
9. What is the stance that Ted Turner takes on Greed?
10. In your opinion, is Greed good or bad? Why?
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