| Question | Answer |
| What are the three questions of production? | 1. What is to be produced?
2. How are the goods and services to be produced?
3. Who will get the goods and services? |
| What is consumer sovereignty? | Consumers choose what is to be produced |
| What is command economics? | Government uses central planning |
| What is market economy? | Satisfy wants of consumers ( private) |
| What is mixed economy? | Mix of government and market economy |
| What is the best method of production? | The least cost of production (capital or labor intensive) |
| What is the circular flow model? | Outer loop: Income flow
Inner loop: Goods and services flow |
| What is the production possibilities curve? | - Output of two goods for economy
- Illustrates scarcity, choice and trade offs |
| What is efficiency in economics? | - Getting the most out of scare resources
- Point outside of curve is unattainable
- Operating within curve means resources are not fully used ( Actual output = less than potential output) |
| How do you notice a change in opportunity costs? | - PPC bowed outwards from origin
- Opportunity cost increase with production |
| What is economic growth? | - Qualitative or quantitative changes in resources ( Tech)
- Sacrifice consumption to increase future consumption |
