GDP divided by population is called Per capita

• GDP divided by population is called… • Per capita

• resources are limited

US GDP Rank • 1 • 2 • 3

• wants and needs are unlimited

• PPF stands for production possibilities frontier

• This condition exist whenever there is not enough of something to fulfill every persons wants and needs • scarcity

• What analogy do economist use to describe the good and bad incentives that persuade our decision making • Carrots and sticks

• 3 economic questions What, how, and for whom _____ to produce _____

Production Efficiency

• The best forgone alternative • Opportunity cost

• An incurred cost that is non-refundable • Sunk cost

Unattainable

• Economics is the study of (two words) • Decision making

• What is your opportunity cost of this class today? • Answers vary

• Simplified constructs of reality • models

• Man made resources • capital

Unemployment

• List the 4 factors of production • Land, labor, capital, and entrepreneurship

• US economy is …mixed

• North Korean economy is closest to … • command

• Workers • labor

• Natural resources • land

• A command element of US economy • Taxes, FDA, public education, highways

• An example of capital • Tools, machines, buildings

• Big picture economics • macro

• Where buyers and sellers come together • Where exchanges take place • markets

• Same or Opposite • Flow of Resources/Goods and $$$$$$

• Whoever produces with a lower opportunity cost has the • Comparative advantage

Efficient production of only grain

Opp. Cost of first 3 wine= 1 grain

command • An economy in which the government controls resources

Positive or normative Micro or Macro • The US economy is the best in the world

• Water and oil are examples of land

• The most desirable point of production is called allocative efficiency

• The risk and creativity to start and continue a successful firm • Entrepreneurship

Positive or normative Micro or Macro • The US GDP is $16 trillion