Question: Explain how productivity relates to market growth.

Answer: It improves the efficiency of the factors of production results in market growth.

Question: Use your notes to identity key components of economic growth and to explain how they function in an economy.

Answer: The key components are productivity and human capital. They function ‘cause productivity is the measure of the amount of output produced in a specific time period with a given amount of resources.

Question: Why is economic growth important?

Answer: It allows people to meet their economic wants and lessons the burden of economic scarcity.

Question: How do businesses and individuals participate in both the product market and the factor market in an economy?

Answer: Businesses hire workers, acquire land, and borrow money in the factor market. Businesses sell their goods and services in product models and people spend their money on these products.

Question: How can simple models help us understand a complex economy?

Answer: Simple models reduce complex situations to basic elements so they can be more easily understood.

Question: How does the study of economics help you make better choices?

Answer: