Mrs. Nelson Economics - Home



Scarcity, Choice, Opportunity Cost, and Trade-OffsName:____________________Scarcity is caused by the combination of ___________________________ and ____________________________. Because of scarcity, we are forced to make ______________.lefttopWhich photograph represents a limited resource?Which photograph represents unlimited wants?_______________ means we can never have all we want of every good and service._______________________________ are the products that satisfy our needs and wants._______________ are any items that can be bought or sold.A _________________ is any action that one person or group does for another in exchange for payment.GoodsServicesWhich of the goods and services that you listed above are needs (necessary for survival)?Which of the above items are simply wants (desires not necessary for survival)?Trade-OffsWhen making __________________________, limited resources force individuals, businesses, and nations to make ___________________.Trade-offs result in _____________________ something of value to get what is most wanted.When people make ______________________________, they _________________ one good or service for another. In making a purchase, the good they are exchanging is_________________.Exchanging one thing to get the use of another is called a ___________________.You make trade-offs every time you use a ___________________ in one way instead of another.The result of a trade-off is what you __________________ in order to get or do ___________________________.Sometimes the choice can involve the _____________________________, for example, choosing to volunteer at an animal shelter instead of going with friends to the local mall.At other times, the choice may _____________________________-buy the newest music CD or save for a cell phone?Opportunity CostsEvery time an economic decision is made, there is the risk of not selecting the best __________.The __________________________________ of a decision is what is given up when the alternative choice is not selected.For example, the opportunity cost of deciding to ______________________________ studying for a math test is the lost opportunity to spend time with friends.The risk is whether the _________________________ studying will result in a higher test score.For example, time is a ________________ resource. There are a ________________________ of hours in a day and you must choose how to use them.If you use one-hour of study a school assignment, the _______________________ are all the other things you could have done during that hour.The ___________________________ is what you would have done for that hour had you chosen not to study.In other words, it is the _________________________ that you have up in order to study.Knowing about the _______________________ and _______________________ can help you make decisions at all levels. You will be able to make wiser use of your resources if you are aware of the _________________ and ________________________________ of your decisions. Businesses must also consider these factors when they make _______________ about investing money or producing _________________________ rather than another.What is the difference between a trade-off and an opportunity cost?rightbottomWhat’s Wrong with this Picture?Analyzing Trade-OffsWhen making an economic decision, you need to be aware of all the costs involved. Suppose you need to by a car to get back and forth to work. Your choices are:37528504210050A new subcompact costing $13,000A 5-year-old car with 60,000 miles for $5,000An old junker with 150,000 miles for $800Which one should you choose? Complete the following exercises to find the initial costs and the yearly costs of owning each car for 4 years.-543560570547500Initial CostsSome initial expenses of owning a car must be must be paid in cash. Typical costs for these items are shown in the table. Use the car costs above and a sales tax rate of 5%.Assume that you have saved $2,000 for the purchase. How much of this money will you be able to put towards the purchase price of each year?Car A:Car B:Car C:SummaryWord BoxFactors of ProductionEntrepreneurshipTrade-offsEconomicsLandCapitalLaborScarcityOpportunity costChoices_____________ is the study of how individuals, families, businesses, and societies use limited resources to fulfill their unlimited wants.Individuals satisfy their unlimited wants in a world of limited resources by making __________.The need to make choices arises because of _____________, the basic problem of economics.The resources needed to make goods and services are known as the ____________________________________.The four factors of production include __________, or natural resources; __________, also known as human resources; _________________, the manufactured goods used to make other goods and services; and _________________________________, the ability of risk-taking individuals to start new businesses and introduce new products and processes.People are forced to make __________________ every time they use their resources in one way and not another.The cost of making a trade-off is known as ________________________- the value of the next best alternative that can be produced from a fixed amount of resources in a given period of time.914400top ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download