Download - Unit I – Scarcity & Choices
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Unit I – Scarcity & Choices
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Provide an example of a good.
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Provide an example of a
service.
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Explain the difference
between a good and a service.
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• Good–Physical objects–Objects that are tangible
• Service–Actions or activities that one person
performs for another
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List the 3 Factors of Production.
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• Land• Labor• Capital –Physical Capital–Human Capital
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Understand the differences between the 3 Factors.
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Land• Natural resources that are used
to make goods and services
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Labor• The effort that people devote to a
task for which they are paid
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Capital• Any human-made resource that is
used to create other goods and services
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Understand the difference between physical and human capital.
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• Physical Capital–Machines, tools, and buildings that are used
to produce other goods and services
• Human Capital– Skills and knowledge gained by a worker
through education and experience
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• “Human capital is as much a part of the wealth of nations as factories, machinery, and other physical capital.”
Economist - Gary Becker
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Support your opinion on which is more important
to a nation’s economy, physical or
human capital.
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Explain how a business would
use the 3 Factors of
Production to make a product.
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Identify and explain the importance of at least 3 personal characteristics common to successful
entrepreneurs.
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Evaluate the importance of entrepreneurs in our society.
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Discuss the “Economizing Problem” that
causes scarcity.
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• “We have UNLIMITED WANTS, but LIMITED RESOURCES.”• This causes the scarcity of
everything.
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Explain situations in your life that
involved opportunity costs
and be able to identify and explain why they are your opportunity costs.
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• Opportunity Cost–The most desirable alternative given
up when a making a decision.
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Explain the economic reasoning behind a making a choice.
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• Whenever people decide whether the benefits of a particular action are likely to outweigh its costs, they engage in a form of benefit-cost analysis....• Benefit > Cost–Do It!!!
• Benefit < Cost–Don’t Do It!!!
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Explain what an incentive is.
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• A reason for doing something• 3 types from Freakonomics
•Moral–one acts out of conscience or conviction
•Social–actions are related to shame
•Economic–people act in their financial interest.
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Provide examples of
how incentives affect people’s
decisions.
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Construct a correctly
labeled a PPC curve.
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Cons
umer
Goo
ds
Capital Goods
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Illustrate where a society is operating
efficiently in regards to the
PPC curve.
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Cons
umer
Goo
ds
Capital Goods
A B
C
D
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Illustrate where a society is
underutilizing its resources in regards to the
PPC curve.
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Cons
umer
Goo
ds
Capital Goods
X
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Illustrate where a society is
operating at an unsustainable
level in the short run in regards to the PPC curve.
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Cons
umer
Goo
ds
Capital Goods
U
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Identify 3 reasons why a PPC curve may
shift.
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• Change in Quantity of Resources Available– Increase in Quantity; Curve shifts to the Right
• Change in Quality of Resources Available– Increase in Quality; Curve shifts to the Right
• Change in Technology– Increase in Technology; Curve shifts to the Right
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Cons
umer
Goo
ds
Capital Goods
A B
C
D
U
X