1.1-1.3

Question 1

Economics

Answer 1

The study of how people choose to use their limited resources to satisfy their unlimited wants (and needs)

Question 2

Scarce resource

Answer 2

not available in sufficient quantities to satisfy all the various ways a society wants to use it

Question 3

Factors of production (resources)

Answer 3

Anything that can be used to produce something else

Question 4

Land

Answer 4

refers to all resources that come from nature, such as minerals, timber, and petroleum

Question 5

Labor

Answer 5

the effort of workers

Question 6

Capital

Answer 6

refers to manufactured goods used to make other goods and services (tools, machines)

Question 7

Entrepreneurship

Answer 7

describes the efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes

Question 8

Opportunity Cost

Answer 8

the value of the next-best alternative, or what you give up by choosing one alternative over another

Question 9

Microeconomics

Answer 9

Focuses on how decisions are made by individuals and firms and the consequences of those decisions

Question 10

Macroeconomics

Answer 10

Examines how the actions of all the individuals and firms in the economy interact to produce a particular level of economic performance as a whole

Question 11

Positive economics

Answer 11

The branch of economic analysis that describes the way the economy actually works. There is a definite right or wrong answer

Question 12

Normative economics

Answer 12

makes prescriptions about the way the economy should work

Question 13

Business cycle

Answer 13

the short-run alternation between economic downturns, known as recessions, and economic upturns, known as expansions

Question 14

Depression

Answer 14

a very deep and prolonged downturn

Question 15

Recessions

Answer 15

periods of economic downturns when output and employment are falling

Question 16

Expansions

Answer 16

sometimes called recoveries, are periods of economic upturns when output and employment are rising

Question 17

Business cycle peak

Answer 17

the point at which the economy turns from expansion to recession

Question 18

Business cycle trough

Answer 18

the point at which the economy turns from recession to expansion

Question 19

Unemployment

Answer 19

the total number of people who are actively looking for work but aren’t currently employed

Question 20

Unemployment rate

Answer 20

A good indicator of what conditions are like in the job market

Question 21

High unemployment rate

Answer 21

Poor market; jobs hard to find

Question 22

Low unemployment rate

Answer 22

Good market; jobs easy to find

Question 23

Labor force

Answer 23

The sum of employment and unemployment

Question 24

Output

Answer 24

the quantity of goods and services produced

Question 25

Aggregate output

Answer 25

the economy's total production of goods and services for a given time period, usually a year

Question 26

Price stability

Answer 26

When the aggregate price level is not changing or is changing slowly

Question 27

Inflation

Answer 27

When the aggregate price level is rising

Question 28

Deflation

Answer 28

When the aggregate price level is falling

Question 29

Production possibilities curve

Answer 29

Measures trade offs, Opportunity cost, efficiency, and economic growth. It illustrates all possible combinations of output.

Question 30

Curve shift outward - economic growth

Answer 30

- Increases in the amount of resources - technological advances - new equipment/machinery

Question 31

Curve shift inward - economic decline

Answer 31

- Loss of resources - war - natural disaster - disease

Question 32

Outside PPC line

Answer 32

Unattainable

Question 33

Inside PPC Line

Answer 33

Inefficient

Question 34

Concave outward PPC

Answer 34

Increasing opportunity cost

Question 35

Constant PPC

Answer 35

opportunity costs are constant

Question 36

Concave inward PPC

Answer 36

Decreasing Opportunity Cost

Question 37

Absolute advantage

Answer 37

Condition that occurs when someone can produce more of a good or service with a given amount of time or resources

Question 38

Comparative advantage

Answer 38

Condition that occurs when someone can produce at a lower opportunity cost than other producers (who can produce more efficiently)

Question 39

Output formula

Answer 39

Opp. Cost (A) =B/A

Question 40

Input formula

Answer 40

Opp. Cost (A) = A/B