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Flashcards in unit 1 test Deck (36):
1

Any resources that are made by humans to create other goods and services are called?

capital

2

An example of a shortage is limited amounts of

food available because the trucks carrying it are on strike

3

What does a production possibilities frontier show?

the maximum amount

4

A country’s production possibilities increase because the available workers become more skilled at using?

Technology

5

What is the struggle among various producers for the consumers business called?

competition

6

What can cause a production possibilities to move to the right?

A new invention lowers the cost

7

Why does even a free market economy some kind of government intervention?

to provide for things that the marketplace does not address

8

Which of the following is not a key economic question?

How should it be ensured that goods and services are paid for?

9

In what kind economy does the government make all the decisions?

Centrally Planned

10

Suppose there is a family in which all the boys expected to become farmers when they are adults just as their fathers and grandfathers did. In which kind of economy do they participate?

Traditional economy

11

You are an entrepreneur with an innovative idea for a new business. In which kind of economy would you have the most opportunity to try to achieve success?

Market Economy

12

Why do markets exist?

Markets allow people to buy what they need to consume and sell the specialized goods

13

Improved technology helps create a higher standard of living for future generations by

providing additional goods and services

14

By the end of the summer, Jason had saved enough money for college, opportunity cost

digital camera

15

Factory building

physical capital

16

which of the following is the kind of decision that can be made at the margin?

whether or not to hire new workers

17

The government of a country must make a decision between spending money on a hospital or border security

guns or butter

18

How would you describe an economy that uses its resources to make the greatest possible number of goods

efficient

19

what does a production possibilities frontier show

the maximum amount that an economy can provide

20

what does the process of specialization do for an economy

it makes it more efficient

21

What is one of the most important advantages of a free market

it encourages growth

22

What incentive motivates a manufacturer to sell a product

making profits on sales

23

who is a free market philosopher

adam smith

24

Which of the following is characteristic of a traditional?

children tend to have the same jobs as parents

25

What is the product market?

The market in which households purchase the goods and services that firms produce

26

The purpose of a production possibilities graph is to?

show alternative ways to use an economies resources

27

The government of a country must make a decision between increasing military spending and subsidizing wheat farms

guns or butter

28

Production possibilities frontiers curve when they are charged on a graph because they show

the increasing costs resulting in increasingly less output

29

Why are all goods and services scarce

all resources are scarce

30

Opportunity cost of a decision

the most desirable alternative given up for the decision

31

what is an important advantage of a free market

it offers a wide variety of goods and services

32

Why does the government use its powers to make sure that businesses disclose so much info to the public?

To make buyers more knowledgeable and safer

33

A person who consumes a good or service but does not pay for it

a free rider

34

What is the term for the total value of all goods and services produced in a particular economy

gross domestic product

35

why are all goods and services scarce?

there’s always a limit on resources

36

what are the trade-offs?

all the possible alternatives that are rejected when a choice is made