Chapter 2: Economic Decision Making Note SheetEconomics – Susbilla

5 Goods You Wish You HadWhat is keeping you from these goods?

  1. ______
  2. ______
  3. ______
  4. ______
  5. ______

Scarcity of Goods

What causes scarcity?

Shortages vs Scarcity

What is a shortage?

What can cause a shortage?

What is the difference between a shortage and scarcity?

What are some real world examples of the causes of shortages today?

How Do We Satisfy Our Wants?

How do we go about meeting our wants?

List the 3 factors of production:

What goes into creating those goods/services, also known as outputs?

What is the full Production Equation?

What is Entrepreneurship and how does it fit into the Production Equation?

Types of Inputs
Land
Labor
Capital

NONRENEWABLE, RENEWABLE OR PERPETUAL ACTIVITY

Tides

Gold

Water

Coal

Trees

Sand

Corn

Sunshine

Tuna

Wind

Oil

How to Improve Productivity

What is Productivity?

How do we calculate productivity?

What are the 2 ways to improve productivity?

Maximizing Utility: Making it Worth It.
What is utility?
How do you go about “maximizing utility?”
What are some ways you maximize utility?
Tradeoffs
What do tradeoffs force you to do?
What is an example of how a business faces a tradeoff?
What is an example of how society faces a tradeoff?
Opportunity Costs
What is an opportunity cost and what is an example? – FILL IN YOUR DECISION MAXTRIX.

Marginal and Negative Utility
What is marginal utility?
What is the law of diminishing utility?
What is an example of negative utility?
Measuring What We Gain/Lose

What does a Production Possibilities Frontier (PPF) tell us?

How can a PPF curve/ graph show us efficiency?
Where can we find maximum efficiency?
How do we know when there is waste?
How can these lines change depending on the circumstances surrounding them?

What does a PPC/PPF show us overall?
How can a PPC/PPF change? What would that look like?
What could be the causes to a change like that and how would that look?

•Draw the original line based on the information given in the chart.
  • Label the FRONTIER, what is POSSIBLE and what would be INEFFICIENT.
  • Label where we can find MAXIMUM EFFICIENCY.

•How would the line change if they found a way to produce more wheat? Draw the new line.

•How would losing the machines needed to produce computer chips affect the line? Draw the new line.

  • How would new, more skilled workers in both areas affect the line? Draw the new line.