Economics – Chapter 1 Worksheet
Worksheet
Section 1 -- (pages 8 – 12)
1. Why is there no such thing as a “free” lunch? Review 28
a.
2. What is the cause of scarcity?
a.
3. List the three basic economic questions each society must fact.
a. .
b. .
c. .
4. Why is economics considered a social science.
a.
5. The demand for a factor of production depends mainly on
a.
6. Economics is the study of the ways in which societies use the _________________________ available to them to
satisfy the unlimited ______________ of their citizens.
7. Economics includes the study of ___________ is produced, ___________ the production takes place, and
___________ the production is intended.
8. Economic decisions are not made in a vacuum. Certain forces, ___________, __________, ___________, &
___________ – have shaped economic development. Weather patterns determine the harvest of a given crop,
which may drive the crop’s price ___________ or ___________.
9. If an item that everyone needs is scarce, how can it be allocated?
a.
10. “Free” items force a business to charge ___________ for the items it sells.
11. Why is scarcity not caused by a shortage of money? Cap 9
a.
12. Why are entrepreneurs considered the “driving force” in the American economy? QC 11
a.
13. Why must a society face the choices about WHAT, HOW, and FOR WHOM to produce?
a.
14. What is the fundamental economic problem? Explain. Review 12
a.
15. What are the 4 factors of production
a. .
b. .
c. .
d. .
Section 2 - pages 14 – 17)
1. What is the meaning of a trade-off? Review 28
a.
2. What is the nature of an opportunity cost
a.
3. What is the economic concept illustrated by the production possibilities frontier
a.
4. In a free enterprise economy, who decides the WHAT to produce? Cap 16
a.
5. What do economists mean when they talk about costs? Cap 15
a.
6. Give examples of each of the following fundamental economic concepts:(not used in the text) p 21
a. Durable goods
b. Consumer nondurable goods
c. Conspicuous consumption
d. Wealth
e. Human capital
7. What needs to be known to be a good decision maker?
a.
8. Why are natural resources considered part of the nation’s wealth?
a.
Section 3 - (pages 19 – 26)
1
Economics – Chapter 1 Worksheet
1. What is the difference between a need & a want? Review 28
a. Need –
b. Want 2. What is the difference between free products & economic products
a. Free products
b. Economic products
3. Why are services excluded when the wealth of a nation is measured?
a.
4. List the 4 factors of production used in production
a. .
b. .
c. .
d. .
5. Why do economists argue that productivity is important
a.
6. What is the difference between product markets & factor markets
a. Product markets
b. Factor markets
7. Why is economic education important?
a.
8. To produce most goods & services, it takes all four factors of production. List all four
a. .
b. .
c. .
d. .
9. Although a nation may have abundant natural resources, human labor, & entrepreneurship, it may not have
enough ______________________ to produce needed consumer goods & services.
10. Lack of capital goods (machinery, equipment, & factories) will deny people a high
_____________________________.
11. What are the four components of a two-sector circular flow model?
a. .
b. .
c. .
d. .
12. What additional component is added to a three-sector circular flow model?
a.
13. What does the word household mean, according to the US Bureau of the Census?
a.
14. What is included in the business sector of the economy? List 5
a. .
b. .
c. .
d. .
e. .
15. What is bought & sold in the factor market? List 3
a. .
b. .
c. .
16. What is bought & sold in the product market? List 2
a. .
b. .
Page 29 – Applying Economic Concepts
1. Scarcity – What effect would a large increase in every citizen’s income have on the economy of a nation?
a.
2. Trade-Offs & Opportunity Cost – If you decide to go to college after graduation from high school, what will be the
opportunity cost of that decision?
a.
2