scarcity and choice / opportunity cost. scarcity – combination of limited economic resources and...
Post on 18-Jan-2018
224 Views
Preview:
DESCRIPTION
TRANSCRIPT
Scarcity and Choice / Opportunity Cost
• Scarcity– Combination of limited
economic resources and unlimited wants
• Allocate– To distribute scarce
resources in order to satisfy the greatest number of wants and needs
The 3 basic questions of economics:1. WHAT to produce?2. HOW to produce it?3. FOR WHOM to produce it?• Productivity– The level of output that results from a given level of
input (used to determine whether resources are being used wisely)
• Efficiency– The use of the smallest amount of resource to produce
the greatest amount of output.• Division of labor– Assigning a small number of tasks to each worker
1. WHAT to produce?2. HOW to produce it?3. FOR WHOM to produce it?• Productivity– The level of output that results from a given level of
input (used to determine whether resources are being used wisely)
• Efficiency– The use of the smallest amount of resource to produce
the greatest amount of output.• Division of labor– Assigning a small number of tasks to each worker
1. WHAT to produce?2. HOW to produce it?3. FOR WHOM to produce it?• Productivity– The level of output that results from a given level of
input (used to determine whether resources are being used wisely)
• Efficiency– The use of the smallest amount of resource to produce
the greatest amount of output.• Division of labor– Assigning a small number of tasks to each worker
• Trade-off– Sacrificing one thing for another
• Opportunity Cost– The value of what was given up in a trade-off
• Production Possibilities Curve– Shows all possible combinations of 2 goods or
services that can be produced in a certain time period
• 2 assumptions:1. Available resources and technology will not
change2. All factors of production are being used as
efficiently as possible
Inefficiency
Economic Growth
EXCHANGE
ExchangeProducers and consumers agree to provide
one type of item in return for another
TYPES OF EXCHANGEBarter
Exchanging one set of goods for anotherMoney
Any item that is readily accepted by people in return for goods and services
CreditAllows consumers to use items before completing
payment for the merchandise
ValueThe amount of money or price something is worth
UtilityThe usefulness to a person or consumer
satisfaction
Self-sufficiencyWhen people can fulfill all their needs without
outside assistanceInterdependence
Events or developments in one region of the world or sector of the economy influence events or developments in other regions or sectors.
top related