123 Unit 14 Economics Study Guide

Apuntes

### Unit 1: Economics Study Guide 1. **Scarcity: What fundamental economic problem forces all individuals and societies to make choices?** **Answer**: **Scarcity** – There are limited resources but unlimited wants, so we can't have everything and must choose. 2. **Rational Decisions: What must a consumer weigh to make a rational economic decision? (Hint: The decision involves comparing benefits versus costs.)** **Answer**: **Marginal benefits vs. marginal costs** (or simply **benefits vs. costs**) – Choose if the benefit is greater than the cost. 3. **Opportunity Cost: Define opportunity cost. If you have two job offers (Job A: $30k salary + 4 weeks vacation; Job B: $32k salary + 2 weeks vacation), what is the opportunity cost of choosing Job B?** **Answer**: - **Definition**: The value of the next-best alternative that you give up when making a choice. - **Opportunity cost of choosing Job B**: **Job A** (specifically, the $30k salary + 4 weeks vacation that you forfeit). 4. **Productive Resources: What are the four main factors of production (productive resources) used to create goods and services?** **Answer**: - **Land** (natural resources)...