1. APK: WHO IS MORE IMPORTANT?
Who is more important producers or consumers?
Answer the question with details to support your answer

2. Why individuals and groups make economic choices? Goal 7.03

3. Economic Activity Market
-A location that allows buyers and sellers to exchange goods and services
Economic Activity
The Decision Makers
Consumers- People who purchase products
Producers- Group of people who create products
Government- Group who controls the market
Foreign Sector- Other countries we trade with

4. The Circular Flow of Economics
Trade
Foreign Sector
Profit is made
Products are bought
Product Market
Buys products
House Market
Government
Businesses Market
Offers Jobs/Revenue
Provides for the market
Income is earned
Factor Market

5. Productivity and Economic Growth
* When a nation’s total output increases over time the circular flow gets larger
The more productive you are the more you profit
We earn more when we do the things we can do well
Productivity
How efficient resources are being used
Specialization
Concentrating on a specific skill
When companies invest in their workers their productivity tends to increase
Division of Labor
Breaking the total task into smaller jobs
Human Capital
The sum of all the skills, ability, and motivation of the people
Makes use of different skills

6. Making Economic Decisions
Trade-Offs
Exchanging one thing for the use of another.
Example
When you buy a product, you exchange money for the right to own that product rather than something else you could buy for the same price.

7. Next BEST alternative that you had to give up for the choice you made
Opportunity Cost
Definition
< What you cannot buy or do when you choose to do or buy one thing rather than another.
Next BEST alternative that you had to give up for the choice you made
Example
- Cleaning the house includes not only the price of cleaning products but also the time you spent cleaning instead of going out

8. Marginal Benefit
We usually do something because we expect to achieve some benefit.
Marginal benefit is the additional benefit associated with an action. 8

9. Car Payment Rent/Mortgage Fixed Cost Expenses that are the same
Variable Cost
Expenses that change with the number of products produced.
Light Bill
Water Bill

10. (complete cost of producing a product)
Add them both up…
Fixed Cost +
Variable Cost =
TOTAL COST
(complete cost of producing a product)