The Awesome Chapter 1 Summary: What is Economics?
Nic Hart
Chris Hughes
Mr. Treadway |Period 3
Overview: In this chapter we learn about some of the key points in economics like want, resources, and scarcity. With these terms we understand the foundation of economics.
Key Terms Want-Things we desire to have
Resource-Anything that is used to produce goods or services
Scarcity-The condition in which our wants are greater than the resources available to satisfy those wants
Opportunity Cost-The most highly valued opportunity
or alternitave forfieted when a choice is made
Trade Off-A situation in which more of one thing is necessarily means less of something
Production Possibilities Frontier-A graphic representation of all possible combinations of two goods that an economy can produce
Rationing Device-A means for deciding who gets what portion of the available resources and goods
Economics-The science that studies the choices of people trying to satisfy their wants in a world of scarcity
Comprehension/Critical Thinking and Writing
1.1 Explain how a production possibilities frontier can be used to illustrate both choice and opportunity cost.
Whenever we make choices we have to give something up in return. Whatever it is that we give up when we make that choice is an opportunity cost. A production possibilities frontier determines what choices we can make because it is the range of items we have the ability to produce. In turn, we can only choose a certain amount of one item and give up more of another to reach our maximum production rate.
1.2 How do costs and benefits affect decisions? What role do incentives play in decisions?
Depending on whether or not the costs out way the benefits or vice versa can change your decision drastically. If the benefits out way the cost then the possibility of a purchase is more likely. On the other hand, if the cost out ways the benefits of a purchase, the likelihood of of the purchase is rather slim.
Chris Hughes
Mr. Treadway |Period 3
Overview: In this chapter we learn about some of the key points in economics like want, resources, and scarcity. With these terms we understand the foundation of economics.
Key Terms Want-Things we desire to have
Resource-Anything that is used to produce goods or services
Scarcity-The condition in which our wants are greater than the resources available to satisfy those wants
Opportunity Cost-The most highly valued opportunity
or alternitave forfieted when a choice is made
Trade Off-A situation in which more of one thing is necessarily means less of something
Production Possibilities Frontier-A graphic representation of all possible combinations of two goods that an economy can produce
Rationing Device-A means for deciding who gets what portion of the available resources and goods
Economics-The science that studies the choices of people trying to satisfy their wants in a world of scarcity
Comprehension/Critical Thinking and Writing
1.1 Explain how a production possibilities frontier can be used to illustrate both choice and opportunity cost.
Whenever we make choices we have to give something up in return. Whatever it is that we give up when we make that choice is an opportunity cost. A production possibilities frontier determines what choices we can make because it is the range of items we have the ability to produce. In turn, we can only choose a certain amount of one item and give up more of another to reach our maximum production rate.
1.2 How do costs and benefits affect decisions? What role do incentives play in decisions?
Depending on whether or not the costs out way the benefits or vice versa can change your decision drastically. If the benefits out way the cost then the possibility of a purchase is more likely. On the other hand, if the cost out ways the benefits of a purchase, the likelihood of of the purchase is rather slim.
