College Economics ch.1

Question 0

Opportunity cost

Answer 0

To obtain more of one thing, society forgoes the opportunity of getting the next best thing

Question 1

Economics

Answer 1

Which is the social science concerned with how individuals,institutions,and society make optimal choices under the conditions of scarcity

Question 2

Utility

Answer 2

The pleasure,happiness,or satisfaction obtained from consuming a good or purchase

Question 3

Marginal analysis

Answer 3

Comparisons of marginal benefits and costs

Question 4

Economic principle

Answer 4

A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions

Question 5

Other things equal assumption

Answer 5

The assumption that factors other than those being considered don’t change

Question 6

Microeconomics

Answer 6

Part of economics concerned with decision making by individual customers,workers,households,and business firms

Question 7

Macroeconomics

Answer 7

Examines either the economy as a whole or its basic subdivisions

Question 8

Economizing problem

Answer 8

The need to make choices because economic wants exceed economic means

Question 9

Positive economics

Answer 9

Focuses on facts and cause and effect relationships

Avoids value judgment and focuses on what economy is actually like

Question 10

Normative economics

Answer 10

Incorporates value judgment about what economy should be like or what particular policy actions should be recommended to achieve a certain goal

Question 11

Economic resources

Answer 11

Means all natural,human,and manufactured resources that go into the production of goods

Question 12

Land

Answer 12

Includes all natural resources

Question 13

Labor

Answer 13

Consists of physical actions and mental activities that contribute to the production of goods and services

Question 14

Capital

Answer 14

Includes all manufactured aids used in producing consumer goods and services

Question 15

Investment

Answer 15

Describe spending that pays for the production and accumulation of capital goods

Question 16

Entrepreneurial abiltiy

Answer 16

Entrepreneur takes the initiative on combining the resources land,labor,and capital to produce a good or service

Question 17

Production possibilities curve

Answer 17

Goods and services that society can produce in a fully employed economy assuming a fixed availability of supplies of resources and fixed technology

Question 18

Law of increasing opportunity costs

Answer 18

As the production of a particular good increases

The cost of producing an additional unit rises

Question 19

Law of Demand

Answer 19

The higher the price of a good,the lower the desired rate of purchase
Inverse relationship between the price of a good and quantity demanded

Question 20

Income effect

Answer 20

Higher prices decrease the purchasing power of our money income

Question 21

Substitution effect

Answer 21

An increase or decrease in the price of a good changes the opportunity of purchasing that good. If the price of a good increases it means that we have to give up more of other goods