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Flashcards in Chapter 1 test Deck (78):
1

the method a country uses to answer the three economic questions

economic system

2

Lady Gaga has $355 to spend.  She decided to use the money to buy face paint instead of going to the symphony.  Lady  Gaga has ________.

made an economic tradeoff

3

3rd largest producer

Japan

4

_______ means not having enough resources to satisfy every need

scarcity

5

not having enough resources to satisfy every need

scarcity

6

If surplus occurs, what can be done to fix the problem?

lower the price

7

______ is the process of choosing which wants and needs will be satisfied

economic decision making

8

What country is the largest producer of goods and services

United States

9

A demand curve illustrates the relationship between quantity demanded and ____

price

10

A ____ is anywhere the economic transactions take place

market place

11

true or false

 

Both individuals and organizations can be producers

true

12

List the 6 steps of the decision making process.

  1. define the problem
  2. identify the choices
  3. evaluate the advantages and disadvantages of each choice
  4. choose one choice
  5. act on your choice
  6. review your choice

13

When many more people wish to purchase a product it's price will tend to ____

increase

14

Individuals and organizations that determine what products and services will be available for sale are called ____

producers

15

Which of the following would an economist most likely classify as a need?

  1. gasoline for a florist's delivery truck
  2. a college degree
  3. a flat screen tv
  4. a part time job to earn extra money

gas for a florist's delivery truck

16

The primary reason business owners make investments and take risks in a private enterprise economy is to

  1. make a profit
  2. satisfy customer needs
  3. develop new products
  4. meet government requirements

make a profit

17

A person who buys or uses goods and services is called a ____

consumer

18

The money left over from sales after all the costs of operating a business have been paid is called ____

profit

19

Give examples of capital resources.

money, machinery, investors, equipment, factories, buildings, computers

20

______ are businesses offering very similar products to the same customers

competitors

21

____ refers to the quantity of a good or service that businesses are willing and able to provide

supply

22

Things that are not necessary for survival but add pleasure and comfort to your life are called ____

wants

23

As competition increases, prices

  1. usually increase as well
  2. are not affected so will usually not change
  3. usually will decrease
  4. there is no way to predict what will happen to prices due to competition

usually will decrease

24

Which of the following address the economic question of how to produce?

  1. growing corn instead of potatoes
  2. requiring individuals to complete specific types of work
  3. producing more capital goods and few consumer products
  4. selling natural resources to other countries

requiring individuals to complete specific types of work

25

A vacation to Belize would be considered a _____

want

26

____ are things that are required in order to live

needs

27

If the quantity of an item supplied is greater than the quantity of an item demanded, a ___ will occur.

surplus

28

John has two hours before having to go to his part time job.  He is deciding between studying for a math exam and taking a nap.  If John chooses to take a nap, the opportunity cost of his decision is

  1. the rest he is getting
  2. the score he will earn on the math exam
  3. the wages from his part time job
  4. all of the above

the score he will earn on the math exam

29

The US economy is sometimes referred to as _____ or _____

free enterprise or private enterprise

30

true or false

 

It is not always easy to determine the products and services that satisfy needs and those that satisfy wants.

true

31

true or false

 

The basic economic problem is that consumers have too many products and services to choose from.

false

32

Give examples of natural resources.

oil, coal, sun, gold, lead, water

33

Capital resources, human resources and natural resources are considered ______ resources

economic

34

Give 5 examples of human resources.

construction workers, teachers, entrepreneurs, accountants, doctors, farmers

35

In a _____ economy the resources are owned and controlled by the government

command

36

An example of a natural resource is

  1. sunlight
  2. a fishing net
  3. a computer programmer
  4. money

sunlight

37

______ is the process of choosing which needs and wants will be satisfied.

economic decision making

38

A _____ illustrates the relationship between the price of a product or service and the quantity demanded by consumers

demand curve

39

What is the second step in the decision making process?

identify the choices

40

The basic economic problem results from ____

scarcity

41

The decision making process is best to use when

  1. you already know the choice you will make
  2. you are facing a decision with several good alternatives
  3. groups rather than individuals are making a choice
  4. you don't have enough money to pay for any of the choices

you are facing a decision with several good alternatives

42

______ resources include tools and equipment used to produce goods and services

capital

43

As competition increases, prices will usually ____

decrease

44

_____ consumes more goods and services than any other country in the world

America

45

The first step in the decision makign process involves

a.  defining the problem

b.  setting the goal

c.  identifying the choices

d.  evaluating alternatives

defining the problem

46

Most of the nations of the world can be classified as having a _____ economy

mixed

47

What are the 3 factors that determine market price?

supply, demand, competition

48

Do businesses and governments deal with scarcity?

Yes, businesses have labor shortages and the government may not collect very many taxes

49

If a shortage occurs, what can be done to fixe the problem?

increase price

50

The primary reason why business invest resources and take risks is to ____

earn a profit

51

In which of the following economic systems is the government's role greatest?

 

a.  mixed

b.  traditional

c.  market

d.  command

command

52

The point where supply and demand are equal is called _____

market price / equilibrium

53

An ____ is a risk taker who uses resources to create a new product or service

entrepreneur

54

Consumers and businesses make decisions based ont heir own self interests is a characteristic of a ____ economy

market

55

In order to determine how available resources will be sued to meet the needs and wants of a country, what 3 questions must be answered?

  1. What to produce?
  2. How to produce?
  3. What needs and wants will be satisfied with the goods and services produced?

56

If the quantity of an item demanded is greater than the quantity of an item supplied, a ____ will occur

shortage

57

Are human resources necessary in producing and services?

Yes, they have to operate machinery or make decisions

58

Larry decided to hang out with his friend, Joe, instead of study for his French exam.  Larry got an F on the test and wasn't able to get into the college he wanted.  The value of a good grade on Larry's french exam is known as the ______

opportunity cost

59

economic resources are also known as _____

factors of production

60

A _____ is when you give up somethng to have something else

trade off

61

____ economy is where the resources are owned and controlled by the people of the country

market

62

What is the purpose of a business?

provide a good or service, satisfy a want or need

63

What is meant by ''the basic economic problem?"

the mismatch of unlimted wants and needs and the limited economic resources

64

_____ are activities provided for the satisfaction of others that are consumed at the same time they are produced.

services

65

The fifth step in the decision making process is _____

act on your choice

66

Things that satisfy our wants through the efforts of other people or equipment are called _____

services

67

The first step inthe decision making process is _____

define the problem

68

Explain 2 reasons why wants are unlimited.

  1. people change their opinions
  2. once you satisfy one need, another is usually created

69

When confronted with the decision to purchase a new pair of boots or go to dinner and a movie with friends the value of the next best alternative not chosen is called the _____

opportunity cost

70

true or false

 

Supply is the quantity of a good or service that a consumer is willing and able to buy at a particular price.

false

71

____ of choice means that you can make economic decisions independently and must accept the consequences of those decisions.

freedom

72

Another name for the US economic system is ____

capitalism

73

Natural resources are ____ materials supplied by nature

raw

74

Things that you can see and touch are called ____

goods

75

The first step in the decision making process is ____ (think of the chart you created about you and a celebrity)

define the problem

76

An automatic car wash would be an example of a _____

service / capital resource

77

The right of ______ means you can own, use or dispose of things of value

private property

78

The second largest producer of goods and services in the world is ____

China