What are the 4 economic resources?

Also known as "factors of production".
Land - all natural resources
Labour - includes education and health levels of the people as well as total working population
Capital - all tools, equipment, and machinery used in producing goods and services
Entrepreneurship - a willingness to take risks and create.

Chapter 1 Quiz

This will occur on Wednesday September 21.



If you want some textbook review, read Chapter 1 and do p. 14 #1,2,3, 5, and p. 24 #5, 10, 11.


Help is available at noon in Room 2033 on Monday and Wednesday this week.

What is the Law of Diminishing Returns? What are Economies of Scale?

Law of Diminishing Returns - We will get less and less extra output when we add additional doses of an input while holding other inputs fixed.


Economies of Scale - Bigger is better when we can divide tasks and specialize.

What is the Production Possibility Curve?

The PPC is a model of an economy that only produces 2 goods. It is used to illustrate scarcity, choice, and opportunity cost.

What are positive and normative statements?

Positive statements deal with facts (i.e. The unemployment rate in Canada now stands at 8.7%).Normative statements deal with opinions and values (i.e. Canadians should save a higher percentage of their income).We also learned about 4 types of graphs - descriptive, historical series, graphs that depict a direct relationship, and graphs that depict an inverse relationship.

Why do economists use models?

Answer: To simplify a complicated reality. Models contain hypotheses and assumptions.They may be expressed as graphs or equations.

What is opportunity cost?

When a choice is made, there is always a cost or sacrifice to this choice. You can't have everything.
Opportunity cost is what is sacrificed/given up when choosing one option over another.

Video to explain opportunity cost

Ben and Jerry's Flavour Graveyard - the opportunity cost of new flavours