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Unit 7: Economics

Unit 7: Economics. . Economics. The production, distribution, and consumption of goods and services or the material welfare of mankind . Scarcity. is the inability to satisfy all wants at the same time. All resources and goods are limited. This requires that choices be made. Resources.

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Unit 7: Economics

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  1. Unit 7: Economics

  2. Economics The production, distribution, and consumption of goods and services or the material welfare of mankind.

  3. Scarcity is the inability to satisfy all wants at the same time. All resources and goods are limited. This requires that choices be made.

  4. Resources are factors of production that are used in the production of goods and services. Types of resources are natural, human, capital, and entrepreneurship.

  5. Choice Choice is selecting an item or action from a set of possible alternatives. Individuals must choose/make decisions about desired goods and services because these goods and services are limited.

  6. Opportunity cost Opportunity cost is what is given up when a choice is made—the highest valued alternative forgone. Individuals must consider the value of what is given up when making a choice.

  7. Price Price is the amount of money exchanged for a good or service. Interaction of supply and demand determines price. Price determines who acquires goods and services.

  8. Incentives Incentives are things that incite or motivate. Incentives are used to change economic behavior.

  9. Supply and demand determines price through their interaction. Demand is the amount of a good or service that consumers are willing and able to buy at a certain price. Supplyis the amount of a good or service that producers are willing and able to sell at a certain price.

  10. Production Production is the combining of human, natural, capital, and entrepreneurship resources to make goods or provide services. Resources available and consumer preferences determine what is produced.

  11. Consumption is using goods and services. Consumer preferences and price determine what is purchased.

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