Economic Decision Making

Question 1

Physical articles that have been produced for sale or use. Three examples are food, clothing, and cars

Answer 1

Goods

Question 2

Work done by someone else for which a consumer, business, or government is willing to pay. Three examples are teaching, gardening, and childcare.

Answer 2

Services

Question 3

The resources used to produce goods and services. Economists define these resources as land, labor, and capital.

Answer 3

Factors of production

Question 4

The willingness and ability to take the risks involved in starting and managing a business.

Answer 4

Entrepreneurship

Question 5

The tools, machines, and buildings used to produce goods and services

Answer 5

Capital

Question 6

A measure of the efficiency with which goods and services are produced. Productivity is often stated as the quantity produced per person per hour.

Answer 6

Productivity

Question 7

The value of the next best alternative that is given up on making a choice. This is the measure of what you must give up to get what you most want.

Answer 7

Opportunity cost

Question 8

A simple model of an economy that shows all the combinations of two goods that can be produced with the resources and technology currently available

Answer 8

Production possibilities frontier PPF