Economic Concepts Worksheet

Economic Concepts Worksheet

Concept Application of Concept from Personal Experience Reference to Concept in Reading

Scarcity and Choice means that people want more than what is available.

I worked for a clothing store and I was there for a long while and I figured that I would ask or a raise or see how I could get a promotion and get more money, well the manager of the store told me that there was no room for promotions in the store because every store gets a limited amount of hours per week and if they give me a promotion or even a little raise someone would have to get fired. “Scarcity and Choice limits our options and necessitates that we make choices. Because we “can’t have it all,” we must decide what we will have, and what we must forgo,” (McConnell and Brue, 2004, Chapter 1, pg. 1).

Opportunity Cost is the cost of passing up the next best choice when making a decision

I work for Hamilton County Schools and there are many accounts that have to be watched over carefully. One account that is used the most is title one and it holds the most amount of money. Well when using this account the principle has to make sure that the money that is coming out of it is for a good cause. So that is where the opportunity cost begins because it is an important part of any company’s decision making processes, that could either help or harm the way the account is used. “Opportunity cost is the amount of other products that must be forgone or sacrificed to obtain 1 unit of a specific good” (McConnell & Brue, 2004, chapter 2).

Factors of production has four resources :

• Land

• Labor

• Capital

• Entrepreneurial ability and when they are all combined to produce goods and services, they are call the “factors of production.

I worked at Kraft and we had to do production every night and in order to make production we had to do at least 3,500 boxes a night and 50 crates total. And at this company we produced gummy savers and cream savers by the bulks and by the box loads. And with that kind of work it showed that we where doing the factors of production. “Factor of production is the scarce resources that are useful not so much for direct and immediate satisfaction of human wants as for producing other good and services” (McConnell & Brue, 2004, chapter 2).

Marginal Analysis is one of the key tools used in the economic way of thinking. It is useful for:

• Cost/Benefits Analysis

• Evaluating economic efficiency

• Maximizing Profits/Utility

My boyfriend and I where out car shopping when the salesman asked what kind of car where we looking for and I stressed to him that I wanted something big but not as big as a ford expedition