Ch.1 "The Basics of Economics"

Question 1

Scarcity

Answer 1

there is not enough of any given resource for everyone to have all of what they want

Question 2

Need

Answer 2

something necessary for survival

Question 3

Want

Answer 3

something that is desired

Question 4

Factors of Production

Answer 4

the resources people use to produce goods and services

Question 5

Capital Goods

Answer 5

the assets used by businesses in the course of producing their products and services

Question 6

Labor

Answer 6

the amount of physical, mental, and social effort used to produce goods and services in an economy

Question 7

Entrepreneur

Answer 7

an individual who identifies a need in the marketplace and works to fulfill it

Question 8

Gross Domestic Product

Answer 8

measures the monetary value of final goods (those bought by the final user) produced in a given period of time

Question 9

Good

Answer 9

an item that is economically useful or satisfies and economic want

Question 10

Consumer Good

Answer 10

intended for final use by individuals

Question 11

Durable Goods

Answer 11

meant for long term use (like a car or furniture)

Question 12

Nondurable Good

Answer 12

goods meant not to last that long, once used they go away quickly (like pencil and paper)

Question 13

Service

Answer 13

an act or use for which a consumer or business is willing to pay for

Question 14

Value

Answer 14

worth that is expressed in dollars and cents

Question 15

Paradox of Value

Answer 15

situation where some necessities have little value (like water) and some non-necessities have a higher value (like diamonds)

Question 16

Utility

Answer 16

the capacity to be useful and provide satisfaction

Question 17

Wealth

Answer 17

accumulation of of products that are tangible, scarce, useful, and transferable from one person to another

Question 18

Market

Answer 18

location or other mechanism that allows buyers and sellers to exchange certain economic product

Question 19

Factor Markets

Answer 19

the markets where productive resources are bought and sold

Question 20

Product Market

Answer 20

markets where producers sell their goods and service to consumers

Question 21

Economic growth

Answer 21

occurs when nation’s total output of goods and services increases over time

Question 22

Productivity

Answer 22

measure of the amount outputs that can be produced with a given set of inputs

Question 23

Human Capital

Answer 23

the sum of the skills, ability, health, and motivation of people

Question 24

Division of Labor

Answer 24

workers are divided into doing their own specific task. It’s very efficient

Question 25

Specialization

Answer 25

factors of production perform tasks that they can do more efficiently than others

Question 26

Economic Interdependence

Answer 26

we rely on other and others rely on us to provide the goods and services available to us

Question 27

Trade-offs

Answer 27

alternative choices when making an economic decision

Question 28

opportunity cost

Answer 28

when you have to choose between different economic decisions, no matter if you make the better decision there is always a loss involved, that is your opportunity cost

Question 29

Production Possibilities Frontier

Answer 29

diagram representing various combinations of goods and/or services an economy can produce when all productive resources are employed

Question 30

Economic Model

Answer 30

set of assumptions in a table, graph, or equations used to describe or explain economic behavior

Question 31

Cost-Benefit Analysis

Answer 31

way of thinking about a problem that compares the costs of an action to the benefits received

Question 32

free enterprise economy

Answer 32

an economy where consumers and privately owned businesses make up the majority of the WHAT, HOW, and FOR WHOM decisions

Question 33

standard of living

Answer 33

quality of life based on the possessions of necessities and luxuries that make life easier

Question 34

consumer

Answer 34

we are consumers, we buy things with the intent of that item being the last thing they are used for

Question 35

conspicuous consumption

Answer 35

buying something with the intent of having others look at you and being impressed, like buying the best brands or the newest models

Question 36

capital goods

Answer 36

goods meant for businesses

Question 37

what does buying something at the margin mean

Answer 37

an economic decision that you make in the moment, a quick decision with little to no thought