Economics: Chapter One

Question 1

want

Answer 1

a thing that we desire to have

Question 2

scarcity

Answer 2

the condition in which our wants are greater than the resources available to satisfy those wants

Question 3

opportunity cost

Answer 3

the most highly valued opportunity or alternative forfeited when a choice is made

Question 4

economics

Answer 4

the science that studies the choices of people trying to satisfy their wants in a world of scarcity

Question 5

resource

Answer 5

anything that is used to produce goods or services. for example, a person’s labor may be used to produce computers, TV sets, and much more; therefore, a person’s labor is a resource

Question 6

product possibility frontier/curve

Answer 6

a graphic representation of all possible combinations of two goods that an economy can produce

Question 7

rationing device (usually price)

Answer 7

a means for deciding who gets what portion of the available resources and goods

Question 8

cost/benefit analysis

Answer 8

almost everything that one does involves costs (negatives) and benefits (positives)

Question 9

marginal

Answer 9

in economics, marginal means additional

Question 10

microeconomics

Answer 10

the branch of economics that deals with human behavior and choices as they relate to relatively small units- an individual, a business firm, or a single market

Question 11

macroeconomics

Answer 11

the branch of economics that deals with human behavior and choices as they relate to the entire economy

Question 12

theory

Answer 12

an explanation of how something works, designed to answer a question for which there is no obvious answer

Question 13

tangible

Answer 13

able to be felt by touch

Question 14

intangible

Answer 14

not able to be felt by touch

Question 15

goods

Answer 15

anything that satisfies a person’s wants or brings satisfaction; also, tangible products

Question 16

utility

Answer 16

the quality of bringing satisfaction or happiness

Question 17

services

Answer 17

tasks that people pay others to perform for them

Question 18

land

Answer 18

all the natural resources found in nature. An acre of land, mineral deposits, and water in a stream are all considered land

Question 19

labor

Answer 19

the physical and mental talents that people contribute to the production of goods and services

Question 20

capital

Answer 20

produced goods that can be used as resources for further production. such things as factories, machines, and farm tractors are capital

Question 21

entrepreneurship

Answer 21

the special talent that some people have for searching out and taking advantage of new business opportunities and for developing new products and new ways of doing things

Question 22

factors of production

Answer 22

synonym for resources, which can be renewable or nonrenewable

Question 23

what is a resource that involves goods used to produce other goods

Answer 23

a capital goods

Question 24

work as a secretary

Answer 24

labor

Question 25

iron ore

Answer 25

land

Question 26

a farm tractor

Answer 26

capital

Question 27

a computer used to write a book

Answer 27

capital

Question 28

a comedian telling jokes on a television show

Answer 28

labor

Question 29

someone inventing a new product

Answer 29

entrepreneurship