After the Test, Get a Gold Book off the shelf- Please write all answers on your own paper. pg , pg , pg , pg Review all terms pg. 34. Please ask a question if you do not know one of these. We will answer it… Finish by answering pg

C.E.L.L. The 4 Factors of Production- Capital, Entrepreneurship, Land, Labor.

Division of labor is a characteristic of an assembly line. It allows for efficiency. The study of economics is important because it enables us to become better decision makers with our scarce resources such as time and money. The cost incurred to produce one more product is called marginal cost. What I get from the one more is marginal benefit. The dollar value of all final goods and services and the most comprehensive measure of a country's total production output is Gross Domestic Product or GDP. A decision-making grid may be used to evaluate two alternative options.

The situation in which some necessities have little value while some non-necessities have a much higher value is known as paradox of value. A decision-making grid may be used to evaluate two alternative options. We always think at the margin. A popular model used to illustrate the concept of opportunity cost is a production possibilities curve. An economy at its production possibilities frontier is operating at it’s full potential, utilizing all of it’s resources. It also illustrates the idea of opportunity cost. The money used to buy the tools and equipment needed for production is known as financial capital. My skills and abilities are termed human capital.

Actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of economic interdependence. “I need you!” Trade-offs, opportunity costs, marginal benefits, marginal costs, and personal priorities are all important to consider when making rational economic decisions/ choices. Desired items in short supply tend to not meet our demands, what do we call these items scarce. Rich and Poor alike are all forced to deal with scarcity. There is never enough! Every time we choose, we lose. If I invest my profits back into new equipment for my company, I am making a capital investment. Invest now to benefit later…

Better technology, tools, new production techniques and training could cause an increase in the productivity of labor and lead to a “right shift” in our nation’s PPF Curve. Giving up one thing to obtain another would best be considered a trade- off. (Choice A) What we give up remember or the satisfaction we could have had with B, C and D is our opportunity cost. Economic growth is critical in determining the standard of living in a nation, which is measured by real GDP per capita. In other words, does the quality of our life really improve, when we experience growth?

The cost of our next best alternative of time, money or a product is referred to as opportunity cost. Capital is the factor of production that can be anything we can use to increase production such as investing in people, machines, or even a robot. An individual or a group of people with a business idea, founders of companies, etc are critical to America’s economic success because they start businesses that employ people and create jobs which in turn improves our lives. This is the entrepreneur. Incentives can be defined as those things that motivate us both positively and negatively.