Economics Notes
Unit 1 – Introduction
Name:________________________
Block:___
Section 1 – The Basics
_________________ is the study of how people seek to satisfy their _________ and
__________ by making choices.
• _________ – Things that are _________________ for survival (air, food, water,
shelter).
• _________ – Something that we desire, but is _________________.
Quickwrite: Can people have everything they want? Why or why not?
____________ – Limited quantities of resources to meet unlimited wants.
• Goods – Physical objects that we want or need.
• Services – Actions or activities that one person or entity performs for another.
What’s the difference between scarcity and a shortage?
• Shortage – Producers _________ or ________ offer goods/services at the current
prices.
• Scarcity _________ exists (for some things), whereas shortages are
________________.
What is an example of something currently in shortage?___________________
Something always in scarcity (for most people)?_________________________
What are the resources that make up or create the goods/services that we
need/want?
__________ of ______________ – Land, Labor, and Capital
• Land – All of the __________ resources used to produce goods and services.
• Labor – The __________ that a person devotes to a task for which that person is
paid.
• Capital – Any __________ resource that is used to __________ other
goods/services.
WARNING - The definition of “capital” changes throughout economics and business!!!
Economics Notes
Unit 1 – Introduction
Name:________________________
Block:___
• _______________ – Leaders who decide how to combine the factors of
production to create new goods and services.
– Take _______
– Start business, create industries
– _______ economic growth
Which factor of production is represented by each of the following?
a) An office building
_____________________
b) An assembly line worker
_____________________
c) A tree used for making paper _____________________
d) Unused soil
_____________________
e) An Artist
_____________________
f) A student
_____________________
Section 2 – Decision Making
________________ are all the ________________ that we give up whenever we choose
one course of action over another. They are applicable at every level of
________________, and technically, many other aspects of our lives.
“_________ or __________” is an explanation for a societal trade-off. If a society
decides to produce more military goods (“guns”), it has less resources to produce
consumer goods (“butter”) and vice versa.
So how do you make your decisions?
_________________ – The ______ desirable ______________ given up as a result of a
decision.
• In other words, the opportunity cost is the _______ “thing” ____ chosen.
• Almost every decision we make has an opp. cost.
Decision-Making Grids can help you ______________ the costs and determine whether
you are willing to __________ the opportunity cost of a choice.
Thinking at the Margin – When you begin to think in terms of how much ____________
to do, rather than making an ______________ decision.
Cost and Benefit Analysis:
• ____________ the ________________ and the _____________ (what will be
sacrificed and gained) in order to make the ______ possible decision.
Economics Notes
Unit 1 – Introduction
Name:________________________
Block:___
• In Econ. once the opportunity cost outweighs the benefits, no more “units” should
be added, made or purchased.
Section 3 – Possibilities
Production Possibility Curves:
• Prod. Poss. Curves show the ________________ ways to use an economy’s
productive ________________.
• Economics works with a lot of _________________. These curves usually deal
with only two products that represent something greater.
Production Possibilities ________________ – a line that can be drawn that shows the
______________ of the products.
Application: In this space, draw a production possibilities curve based upon two things
that you could do with your time in class. What are some of the trade-offs that occur on
the graph?
Because land, labor, and capital are scarce, using the inputs to ____________________
______________________________________________________________________.
Efficiency, Growth and Cost?
___________________ means using resources in such a way as to ______________ the
production of goods and services.
________________________ – As production _________ from one item to another,
more and more resources are necessary to increase production of the second item.
Some ______________ are better suited to create a specific ___________ / __________.