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1.1 and 1.2 quiz (8/29/24)
scarcity
we have unlimited wants and needs but limited resources
ALWAYS EXISTS
shortage
quantity supplied < quantity demanded at current price
TEMPORARY
guns and butter
countries make decisions towards military spending or other resources
factors of production
1) land
2) labor
3) capital
4) entrepreneurship
land (examples and payment)
ex. soil, water, plants, animals
payment=rent
labor (examples and payment)
ex. human effort, work
payment=wages
capital (examples and payment)
ex. machinery, tools, equipment used to make goods and resources
payment=interest
entrepreneurship (examples and payment)
ex. innovators (new ways to use land, labor, capital)
payment=profitt
trade-offs
alternatives you give up when you make a decision
opportunity cost
next best decision foregone
