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What is the role of entrepreneurship in the factors of production?
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Entrepreneurship involves coordinating production and sales, taking risks, and committing resources to create goods and services.
Provide an example of a marginal decision.
An example of a marginal decision is whether to keep a store open for one more hour, considering the marginal benefits and marginal costs.
List the factors of production.
Factors of production include Natural Resources, Labor, Physical Capital, Human Capital, and Entrepreneurship.
How might government policies affect incentives?
Government policies can affect incentives by altering the benefits and costs associated with certain behaviors, thereby motivating or discouraging specific actions.
What is scarcity, and how does it affect decision making?
Scarcity means society has limited resources and cannot produce all the goods and services people wish to have. It requires individuals and societies to make decisions on how to allocate resources effectively.
Give an example of how scarcity affects even wealthy individuals.
Wealthy individuals like Glenn Taylor face constraints such as time, highlighting that scarcity applies to everyone, regardless of wealth.
Give an example of an opportunity cost.
An example of opportunity cost is Kobe Bryant choosing to go pro instead of attending college.
Explain the difference between 'Efficiency' and 'Equity'.
Efficiency is the maximization of production, while Equity is the fair distribution of benefits among society members.
What does it mean to think at the margin?
Thinking at the margin means making decisions based on small, incremental changes in resources or benefits.
What does ‘economy’ derive its meaning from?
Economy derives from the Greek word meaning 'one who manages a household.'
Define 'economics'.
Economics is the study of how societies use limited resources to produce, trade, and consume goods and services.
What is opportunity cost?
Opportunity cost is the next best alternative that must be forgone to undertake a certain action or decision.
Describe a scenario that involves a decision based on opportunity cost.
A scenario could involve deciding whether to repair a car transmission: the decision would be influenced by the cost of repair versus the resale value of the car.
What impacts the behavior of people according to economic principles?
Incentives, which are expected benefits minus opportunity costs, impact people's behavior.
How do people face trade-offs in decision making?
People face trade-offs by having to give up one thing in order to gain another, such as choosing between spending time on work or leisure.
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