1. Economics
Chapter 1 Review

2. Vocabulary/Terms Durable Good Factor Market Consumption Want
Free Enterprise Economy
Capital Good

3. Vocabulary/Terms Productivity Production Possibilities Frontier Need
Service

4. Concepts Division of Labor Production Possibilities Frontier
Paradox of Value
Factors of Production
Entrepreneurship
Cost Benefit Analysis

5. Concepts Decision Making Grid Gross Domestic Product (GDP)
Economic Model
Capital Goods
Nondurable Goods
Economic Interdependence

6. Concepts
Specialization
Utility

7. Fundamental Economic Problem: Scarcity
Page 6

8. Circular Flow of Economic Activity
Page 15

9. Opportunity Costs
Page 21

10. Economic Growth
Page 22

11. Trade-offs and Opportunity Costs
Page 27

12. Essay Questions
Define scarcity and explain how scarcity is involved in making decisions. How do the concepts of opportunity cost and trade offs play a role in the decision making process? What economic model could one employ to help determine their options? Explain how this would help.

13. Essay Questions
Why is cost, measured in dollars alone, an insufficient measure of value? What concept do economists use to better evaluate a decision? Why is it important to take into consideration other factors when making decisions?

14. Essay Questions
“Nothing is particularly hard if you divide it into small jobs” H. Ford
Discuss how the quote from Henry Ford applies to building a car. How would Adam Smith describe this process? Are Smith and Ford correct about their thoughts? Why?