Our Economic Choices Chapter 1 Lesson 2

Factors of Production Land- natural resources, not created by people. Economists think of land being fixed or in limited supply. New technology can extract new resources Ex: Fracking Capital- tools, machinery, equipment used in production of other goods. Labor- people with all their efforts, abilities and skills. Factors such as famine, disease and baby boom have all had an historical impact on labor Entrepreneurs- risk takers, people who start businesses and drive the economy.

Production Possibilities All of the possible combinations that an economy can produce. The production possibilities curve can help identify possible alternatives Every point on the curve shows what is possible if all resources are fully employed.

Opportunity Cost The value of the next best alternative given up. Opportunity costs exist in almost every situation, but is not always measured in dollars and sense. Any time you have a choice and a trade off, you have an opportunity cost.

Consumer Choice Trade Offs- alternative choice that is given up in favor of the choice we make. See- Decision Making Chart This type of grid helps you evaluate a number of choices based on chosen criteria. Opportunity Cost for Consumers- Consumers also give something up when they make a choice. That cost is opportunity cost. There is not necessarily a monetary value placed on it.

Consumer Rights The right to safety- Protection against goods that are dangerous to life and health The right to be informed- receive information that can be used to stay informed. The right to choose- the right to be protected in markets where competition may not always exist The right to be heard- the guarantee that consumer views will be considered. The right to redress- the ability to receive adequate payment from producers if harmed.

Consumer Responsbilities Include important documents to support your case- receipts, contracts, etc Report the problem immediately. Respond to a company in writing through letter or email if necessary. Keep cool. Keep a record of your efforts to get a problem solved.