1.1

Question 1

microeconomics

Answer 1

branch of econ that examines the behavior of individual decision-making units in the economy

Question 2

macroeconomics

Answer 2

branch of econ that examines the economy as a whole to obtain a broad or overall picture of the economy

Question 3

aggregates

Answer 3

wholes or collections of many individual units (sum of consumer behaviors and of firm behaviors) and total income and output of the entire economy

Question 4

scarcity

Answer 4

idea that resources are insufficient to satisfy unlimited human needs and wants

Question 5

choice

Answer 5

must be made about what will be produced and what will be foregone

Question 6

efficiency

Answer 6

making the best possible use of scarce resources to avoid waste

Question 7

allocative efficiency

Answer 7

any good or service is produced to the point where the last unit provides consumers with a marginal benefit equal to the marginal cost of production

Question 8

equity

Answer 8

idea of being fair or just in an economic way

Question 9

economic well-being

Answer 9

concept that refers to levels of prosperity, economical satisfaction and standards of living among members of society

Question 10

aspects of economic well-being

Answer 10

1. job and housing
2. goals and potential
3. quality of life
4. all of the above

Question 11

sustainability

Answer 11

maintaining the ability of environment to continue to produce and satisfy needs and wants into the future

Question 12

change

Answer 12

1. in econ theory - between situations caused by changes in variables
2. in real world - changes in world in which economical events occur

Question 13

interdependence

Answer 13

idea that economical decision-makers interact with and depend on each other (individuals, communities, nations, groups of nations); no one is self-sufficient

Question 14

what happens with increasing globalization

Answer 14

interdependence increases

Question 15

intervention

Answer 15

act of government of becoming involved with the workings of markets in order to correct for the market’s defficiencies

Question 16

the fundimental problem with economy

Answer 16

scarcity and choice

Question 17

goods

Answer 17

physical objects people need and want

Question 18

services

Answer 18

non-physical activities people need and want

Question 19

resources

Answer 19

inputs to produce goods and services

Question 20

resources =

Answer 20

factors of production

Question 21

which factors of production are there

Answer 21

land, labour, capital, entrepreneurship

Question 22

land

Answer 22

natural resources: agricultural and non-agricultural, and everything under or above (minerals, oil, underground water)

Question 23

labour

Answer 23

physical and mental effort that people contribute to the production of goods and services (workers)

Question 24

capital =

Answer 24

capital good, investment good

Question 25

which types of capital are there

Answer 25

physical, human, natural and financial capital

Question 26

physical capital

Answer 26

man-made inputs (machinery, tools, factories, road systems, airports)

Question 27

human capital

Answer 27

skills, abilities, knowledge acquired by people, that make them more productive

Question 28

natural capital

Answer 28

environmental capital - expanded ‘land’ (includes everything in land + additional resources (biodiversity, ozone))

Question 29

financial capital

Answer 29

investments in financial instruments (shares, stocks, bonds, funds)

Question 30

entrepreneurship =

Answer 30

management

Question 31

entrepreneurship

Answer 31

human skill involving the ability to innovate by developing new ways of doing things

Question 32

opportunity cost

Answer 32

the value of the next best alternative that must be sacrificed to obtain something else (in monatery and time values)

Question 33

free goods

Answer 33

any good that is not scarce and therefore has no opportunity cost

Question 34

economic goods

Answer 34

any good that is scarce, either because it’s a naturally-occuring scarce resource, or because it’s produces by scarce resources - opportunity cost bigger than 0

Question 35

economic goods that are available free of charge

Answer 35

1. goods provided by the government
2. certain natural resources - common pool resources