1. Economics Benchmark Review Basic Concepts and Terms

2. Identify entrepreneur Creates a new business or product or improves an existing one Willing to take financial risk Looking for monetary gain

3. Define scarcity Basic problem of economics that results from the combination of unlimited wants and limited resources. It forces people to make choices.

4. Identify the three questions of production. What How For Whom

5. What is the opportunity cost of producing at C? Fish Caught v Fish Caught A B C Hours Taught

6. Identify the three factors that determine value. desirability scarcity utility

7. Identify the three systems of exchange barter money credit

8. Identify three ways businesses try to increase efficiency. Division of labor Specialization Allocation of resources

9. The next best choice you can make describes? Opportunity Cost

10. Investing in education, training, morals, values, health and skills are examples of? Human capital

11. To focus on one area of production is an example of: specialization

12. What are the factors of production? natural human capital *Entrepreneurs

13. Market In this model economic system individuals make decisions about what, how, and for whom to produce.

14. Market In this model economy factors of production are owned by individuals

15. Market Which model economy would best accommodate a pet psychic business?

16. Voluntary Exchange The unconditional and mutually beneficial transfer of products between producers and consumers

17. Self-interest Adam Smith’s theory: The impulse that encourages people to satisfy their wants and needs which consequently benefits society.

18. Identify the five features of the U.S. free enterprise system. 1.Private property & contracts 2. Individual choice 3.competition 4.Self-interest & voluntary exchange 5.Limited government

19. The idea that money is worth more now than it will be in the future. Present value 1990 2010/ less $2010 / more $

20. Identify eight different types of investments Savings account Money market Certificate of deposit Bond Blue-chip stock Growth stock Real estate Commodities / Precious metals, oil, crops, etc.

21. Identify the four things to consider when making an investment. rate of return risk/ diversification liquidity tax benefit.

22. compound interest money earned on a sum of money that is invested plus the interest paid on that money over time. Time and rate of return have biggest impact!