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Prep. Unit 1
Questions that you should be able to answer
Question | Answer |
---|---|
What are the three economic questions? | What to produce? How to produce? For whom to produce for? |
What are the 4 factors of production? | Capital, Land, Labor, Entrepreneurship |
The law of increasing costs means that when an economy increases the production of one item... | The opportunity cost goes up |
The government of a country must make a decision between increasing military spending and subsidizing wheat farmers. This kind of decision is a... | Guns & Butter issues |
The opportunity cost of a decision can be examined by using a... | (PPG)Production Possibilities Graph |
An efficient economy is one that... | uses its resources to make the most goods and services |
The purpose of a production possibilities graph is to... | Show alternative ways to use an economy's resources |
What was the name of a philosopher of free market? (Hint: Invisible hand) | Adam Smith |
Why does even a free market economy need some government intervention? | to provide for things that the marketplace does not address |