Unit 2 Review

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Transcript Unit 2 Review

After the Test, Get a Gold Book off the shelfPlease write all answers on your own paper.
•pg. 21 1-2, pg. 25 1-2, pg. 31 1-2, pg. 34 1-2
•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. 35-36 1-10
Woodstock Shoe House
(production possibilities)
Tennis Shoes
The 4 Factors of ProductionCapital, 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.
•A decision-making grid may be used to evaluate
two alternative options. We always think at the
•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 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
•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…
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.
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.
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
•Incentives can be defined as those things
that motivate us both positively and