Econ Test 1 Study Guide

Econ Test 1 Study Guide - Economics Test#1 Study Guide...

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Economics Test #1 Study Guide Fundamental Economic Problem: Scarcity = VILLAIN There are not enough resources to fulfill our wants/ Limited resources are insufficient to fulfill our wants Fundamental questions of economics: What is produced? How is it produced? For whom is it produced? Factors of production – human capital, physical capital, land-natural resources, entrepreneurship Productive resources: Human resources Natural resources Capital resources Money and time aren’t resources Money is just a medium of trade Human capital is important because it is the knowledge and skills needed to succeed in the workforce. It is the most important resource because it is up to you to expand your human capital and be beneficial to society. Goal is to increase individual and societal welfare. + Entrepreneurs are willing to accept the risk of losing money because profit provides an incentive. + People choose because resources are limited and cannot fulfill wants, so they have to make decisions/choices. If people do not have a choice, there is no economics because economics is individual choices on limited resources with competing wants. Incentives mold the outcome of choices.
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Econ Test 1 Study Guide - Economics Test#1 Study Guide...

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