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Jake Graves

Unit 1 Objectives

1. People always want more, no matter how much they already have, that’s why scarcity affects everyone. It is when there are not enough resources for everyone’s needs.

2. One question is “what will be produced?” A society must decide the mix of goods and services it will produce. The goods and services a society chooses to produce depend on the natural resources it possesses. The next question is “how it will be produced?” Answering this question involves using scarce resources in the most efficient way to satisfy society’s wants. The last question is “for whom will it be produced?” Which is basically how goods and services are distributed among people in society.

3. The four factors of society are factors of production, land, labor, and capital. Factors of productions are the resources needed to produce goods and services. Land refers to all natural resources used to produce goods and services. Labor is all the human effort used to produce goods and services. Capital is all the resources made and used by people to produce goods and services.

4. Choice is at the heart of economics because choice powers an economy. The choices people make are shaped by incentives, expected utility, and by the desire to economize.

5. An opportunity cost is the value of something that is given up by choosing one alternative over another. A trade-off is what you give up when you make an economic choice. Usually trade-offs do not require all or nothing choices, they involve giving up some of one to gain more of another.

6. If you are doing a cost-benefit analysis you can make a decision grid, which shows what you get and give up when you make choices. They are one of the most useful tools for individuals, businesses, and governments when they need to evaluate the relative worth of economic choices.

7. A PPC is a graph used to illustrate the impact of scarcity on an economy by showing the maximum number of goods...