Tomorrow we will be having an Econ Quiz. We have spent a couple of days reviewing, and today your child worked on a "practice" quiz, which is actually more difficult than the final quiz. This quiz, on goldenrod paper, is due tomorrow, May 16. This assignment is open-book, and the "goldenrod" quiz can be part of the notes students may use when taking the Final Econ Quiz on Wednesday. The Final Econ Quiz will include examples of Supply, Demand, Opportunity Cost, Wants, Needs, etc. It will be important that you child understand the "essence" of the word; simply memorizing the definition might not be the best approach.
Below are the definitions; an example, when provided, is in bold, italic print.
Economic Terms
2. Scarcity: When there is not enough of a good (product) or service to meet the needs of everyone who wants the good or service
3. Opportunity Cost: The good or service that is given up when you buy your first choice. (What you decide NOT to buy to get your first choice.)
4. Profit Motive: Profit (money a business makes) is why a company, business, or store is started. The owners want to make money.
5. Competition: Competition helps consumers because competition can make prices go lower. (Meijer may charge less for cereal than D&W to get you to shop in their store. The competition is between Meijer and D&W.)
6. Demand: The desire and ability to pay for a product or service. (I have money, so I can buy new shoes; I have a demand for shoes.)
7. Law of Demand: The idea that consumers will purchase more of a good at lower prices, and less of a good at higher prices. The idea is also that higher prices will always lead to lower quantities of a good being demanded. (For example, when gas prices go up, people may make fewer “unnecessary” trips.)
8. Supply: The amount of goods/services producers are willing to sell at various prices. (For example, stores are willing to sell school supplies at a lower price before school starts because they have a high number of school supplies.
9. Law of Supply: The idea that producers will supply more of a product or service at higher prices, but less of a product at lower prices. (Before school starts, when everyone wants supplies, the stores have many school supplies that they will sell at a lower price. After school starts, the number of supplies is lower, and the price is higher.)
10. Compare Inelastic Demand and Elastic Demand: With an Inelastic Demand, people will always keep buying a product no matter what the cost. (For example, people will always buy gas for their car, no matter how expensive. We need gas in our car to get to our job, so we buy it at any price.) With an Elastic Demand, people will buy less of a product if the price becomes too expensive and may look for a substitute product if the price is too high. (For example, if the price of Coke increases, you have options; don’t buy as much Coke, buy another brand like Meijer or Faygo cola, or buy no cola at all.)
11. Economic Resources: Land, Labor, Capital, Entrepreneurship, Technology
12. Wants: Products we desire but don’t need; (for example, you need shoes, but you might WANT Zig-Tech Reeboks! You need food, but you might WANT to only eat food from McDonald’s.)
Needs: Those things you need to maintain life-food, water, a place to live, clothing.
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