Chapter 1

Question 1

Wants

Answer 1

desires that can be satisfied by consuming a good or service.

Question 2

Needs

Answer 2

Things necessary for survival

Question 3

Scarcity

Answer 3

When wants are unlimited, but the resources available to satisfy them are limited.

Question 4

Economics

Answer 4

the study of how people choose to use scarce resources to satisfy their wants

Question 5

Goods

Answer 5

physical objects that can be purchased, such as food, clothing, and furniture

Question 6

Services

Answer 6

work that one person performs for another for payment

Question 7

Consumer

Answer 7

a person who buys goods and services for personal use

Question 8

Producer

Answer 8

a person who provides services or makes goods

Question 9

Factors of Production

Answer 9

Land, Labor, Capital, Entrepreneurship

Question 10

Land

Answer 10

all natural resources formed on or under the ground that are used to produce goods and services

Question 11

Labor

Answer 11

all the human time, effort, and talent that go into the making of products

Question 12

Capital

Answer 12

all the resources made and used by people to produce and distribute goods and services

Question 13

Entrepreneurship

Answer 13

the combination of vision, skill, ingenuity, and willingness to take risks that is needed to run new businesses

Question 14

Incentives

Answer 14

benefits offered to encourage people to act in certain ways

Question 15

Utility

Answer 15

the benefit or satisfaction gained from the use of a good or service

Question 16

Economize

Answer 16

to make decisions according to what you believe is the best combination of costs and benefits

Question 17

Trade-off

Answer 17

the alternative that you give up when you make an economic choice

Question 18

Opportunity Cost

Answer 18

the value of the next best alternative/ what you give up by choosing one option over the other.

Question 19

Cost benefit analysis

Answer 19

the price of examining the costs and the expected benefits of a choice as an aid to decision making

Question 20

Marginal Cost

Answer 20

the cost of using one more unit of a good or service

Question 21

Marginal Benefit

Answer 21

the benefit or a satisfaction received from using one more unit of a good or service

Question 22

Statistics

Answer 22

numerical data or information - to see patterns of behavior

Question 23

Microeconomics

Answer 23

the study of the behavior of individual players in an economy, such as individuals, families, and businesses.

Question 24

Macroeconomics

Answer 24

the study of the behavior of the economy as a whole and involves topics such as inflation, unemployment, aggregate demand, and aggregate supply

Question 25

Positive Economics

Answer 25

a way of describing and explaining economics as it is, not as it should be

Question 26

Normative Economics

Answer 26

a way of describing and explaining what economic behavior ought to be, not what it actually is