Name:
Unit 1
Scarcity and the Factors of Production!
Use Chapter 1, Section 1 (pages 3-6) to answer the following
In the chart below find the definition of the term given.
Economics
Need
Want
Goods
Services
Scarcity
Shortage
Factors of Production
Land
Capital
Physical Capital
Human Capital
Entrepreneur
Now that you know some terms, use them to answer the following questions on the back!
Answer the following and be ready for a discussion on them tomorrow!
1.
What is the difference between a good and a service?
2.
Why is the idea of scarcity a starting point for thinking economically?
3. How is scarcity different from shortages?
4. Describe the three factors of production?
5. What special advantages does physical capital offer?
6. What role do entrepreneurs play in the economy?
7. Which factor of production is represented by each of the following?
A) an office building
B) an assembly line worker
C) a tree used to make paper
D) unused soil
E) an artist
F) a student
Opportunity Costs and Production Possibilities Curves
Chapter 1 Sections 2 and 3 (p. 8-18)
1. What is a trade off?
2. What does the term “guns or butter” mean?
3. What is an opportunity cost?
4. Why must the opportunity cost of a decision always be something desirable?
5. What does it mean to think at the margin?
6. What is a production possibilities curve?
7. What is underutilization?
8. What is the law of increasing costs? Give an example.
9. How is underutilization depicted on a production possibility curve?
10. How does a production possibility curve illustrate how efficient an economy is?
11. How does a production possibilities curve illustrate opportunity costs?
12. Suppose you can save $50 by buying a car in Grand Rapids. If the trip requires you only to pay $10 in gas, is the trip
worthwhile? Why or why not?
Opportunity Costs In Your Daily Life
Each day you are confronted with decisions and must weigh the costs and rewards for each decision. Your job is to
think of 2 times in your day when you have to make a decision. For each decision you must label the
Decision to be decidedChoice 1-
Alternatives
Choice 2-
Choice 1-
Alternatives
Choice 2-
Benefits
If you decide to do this then what is your
opportunity cost?
Benefits lost because of this decision
Decision to be decided-
Benefits
If you decide to do this then what is your
opportunity cost?
Benefits lost because of this decision
Mix CD Op p or t un it y Cost s
You h av e just a sh or t t im e b e f or e y ou w ill n o lon g e r b e ab le t o d ow n load an y
m or e n e w m usic f or t h e r e st of y our lif e !
Wh ich 1 5 son g s f r om all t im e w ill y ou ke e p ?
1 ._________________________________________
2 ._________________________________________
3 ._________________________________________
4 ._________________________________________
5 ._________________________________________
6 ._________________________________________
7 ._________________________________________
8 ._________________________________________
9 ._________________________________________
1 0 . ________________________________________
1 1 . ________________________________________
1 2 ._________________________________________
1 3 ._________________________________________
1 4 ._________________________________________
1 5 ._______________________________________