1.  Mr. Bordelon University High School

2.  What is economics?

3. o The study of how people, businesses, and nations make choices to satisfy their wants and needs.

4.  Utility

5. o Economicky way of saying “satisfaction.”

6.  A limited amount of resources to meet an unlimited amount of needs and wants.

7. o Scarcity.

8.  The amount of choices available at any one time.

9. o Trade-offs.

10.  Opportunity cost

11. o The value of the best alternative not chosen.

12.  The resources used to make goods and services.

13. o Factors of production

14.  What are the factors of production?

15. o Land o Labor o Capital o Entrepreneurship

16.  What is land?

17. o Baby, don’t hurt me, don’t hurt me no more.

18.  What is land? o Natural resources.

19.  What is labor?

20. o Paid human work/effort.

21.  What is capital?

22. o Manmade resources.

23.  Physical capital  Human capital

24.  Physical capital o Tools, machinery, factories  Human capital

25.  Physical capital o Tools, machinery, factories  Human capital o Knowledge, skills, experience, education

26.  Entrepreneur

27. o Risk-taker o Person who makes the decisions about land, labor, and capital to make products.

28.  Hypothetical model of an economy that produces two very different products, and shows us the opportunity cost of producing one product or another.

29. o Production Possibilities Curve (PPC)

30.  Underutilization

31. o Seen on a PPC, when an economy does not use all of the available resources to produce all the goods it can. Inefficient.

32.  Efficiency on a PPC

33. o Shown on the curve itself, any point along the curve is efficient. It is efficient because that economy is using all the resources possible to make products.

34.  Impossibility on PPC

35. o Outside of the actual curve, a point of impossibilities occurs because there is no ability to reach that level of production given current resources.

36.  What is the law of increasing opportunity costs?

37. o When we switch from one item of production to another, it costs us more and more to do so. o Gives the PPC it’s actual curve shape. Resources are not perfectly adaptable, so it’s not a one-to-one exchange.

38.  Moving from Point C to Point A, what is the opportunity cost of producing guns?

39. o 20 butter. o We’re producing 100 guns, up from 25, for a gain of 75 guns. o To do that, we have to give up making 20 butter.

40.  Moving from Point A to Point B, what is the opportunity cost of producing butter?

41. o 20 guns. o We’re producing 45 butter, up from 30, for a gain of 15 butter. o To do that, we must give up 20 guns.