Unit 1: intro to econ

Question 1

what is economics?

Answer 1

the study of how people, businesses, and societies use their scarce resources to best satisfy unlimited wants/needs

Question 2

needs

Answer 2

things for survival

Question 3

wants

Answer 3

things we would like to have but are not necessary to survive

Question 4

goods

Answer 4

physical objects that satisfy wants or needs

Question 5

services

Answer 5

labor performed by someone for a customer for money

Question 6

basic economic problem

Answer 6

limited resources vs. the needs and wants of people

Question 7

labor

Answer 7

the effort people devote to a task for which they are paid

Question 8

land

Answer 8

the all natural resources used to make goods and services (land, coal, water, wood, etc.)

Question 9

capital

Answer 9

any human made resource that is used to produce other goods and services

Question 10

entrepreneuship

Answer 10

combines all resources to produce a new good or service; ambitious leaders who combines land and capital to create and market new goods and services

Question 11

____ is limited resources to meet unlimited wants

Answer 11

scarcity

Question 12

we cannot have everything we ___- we use ____ (making choices)

Answer 12

want; economic reasoning

Question 13

shortage

Answer 13

a situation in which a food or service is unavailable; a producer cannot or will not offer a good or a service sometimes

Question 14

shortages are ___; goods are ___ because resources are ___

Answer 14

temporary; scarce; scarce

Question 15

value

Answer 15

monetary worth ($$$) of a good or service as determined by the market

Question 16

can water ever be scarce?

Answer 16

no because there is enough water in the world for everyone to have a lot of it

Question 17

diamond water paradox

Answer 17

diamonds are more expensive than water because diamonds are more scarce

Question 18

utility

Answer 18

ability of a good or service to be useful and transferable from one person to another

Question 19

paradox of value is further explained by both ___ and ___

Answer 19

scarcity and utility

Question 20

the value of a good or service is determined by how ___ it is and how ___ it is to people

Answer 20

scarce; useful

Question 21

wealth

Answer 21

the accumulation of products that are tangible, scarce, have utility, and transferable from one person to another

Question 22

TINSTAAFL

Answer 22

There Is No Such Thing As A Free Lunch

Question 23

physical capital

Answer 23

man made objects that create goods or services (buildings, tools, factories, etc.)

Question 24

human capital

Answer 24

the knowledge or skill a worker gains through education and experience (artist, architect, etc.)

Question 25

Production Possibilities Frontier

Answer 25

a diagram representing all possible combinations of goods and services an economy can produce when all productive resources are fully employed

Question 26

efficiency

Answer 26

when an economy uses its resources in such a way to maximize the production of goods and services

Question 27

law of increasing cost

Answer 27

when production increases, so do costs

Question 28

opportunity cost

Answer 28

the most valuable thing that is given up when choosing one alternative over another (the option you lost)

Question 29

trade-off

Answer 29

alternative that must be given up when one choice is made rather than another (the two options you have)