2.02 Key Terms

Question 1

Capital Goods

Answer 1

Manufactured or constructed items that are used in the production of goods and services

Question 2

Consumer goods or services

Answer 2

Products produced for personal consumption

Question 3

Consumption

Answer 3

The process or activity of using goods and services; The economic process or activity of using goods and services

Question 4

Demand

Answer 4

The quantity of a good or service that buyers are ready to buy at a given price at a particular time

Question 5

Distribution

Answer 5

The economic process or activity by which income is divided among resource owners and producers

Question 6

Economic Goods

Answer 6

Physical objects that are useful, scarce, and transferable and which satisfy economic wants

Question 7

Economic Resources

Answer 7

The human and natural resources and capital goods used to produce goods and services

Question 8

Economic Services

Answer 8

Productive acts that are useful, scarce, and transferable and which satisfy economic wants

Question 9

Economic Want

Answer 9

A desire for something that can only be satisfied by spending money

Question 10

Economics

Answer 10

The study of how to meet unlimited, competing wants with limited resources

Question 11

Elastic Demand

Answer 11

A form of demand for products in which changes in price correspond to changes in demand

Question 12

Elasticity

Answer 12

An indication of how changes in price will affect changes in the amounts demanded and supplied

Question 13

Equilibrium

Answer 13

The point at which the quantity supplied is equal to the quantity demanded

Question 14

Excess Demand

Answer 14

The situation that exists when demand is greater than supply

Question 15

Excess Supply

Answer 15

The situation that exists when supply is greater than demand

Question 16

Exchange

Answer 16

The economic process of trading one good/service for another

Question 17

Factors of Production

Answer 17

Productive resources; human and natural resources and capital goods

Question 18

Human Resources

Answer 18

People who work to produce goods and services

Question 19

Industrial Goods and Serivces

Answer 19

Products purchased by producers for resale, to make other goods and services, and/or to use in business operations

Question 20

Inelastic demand

Answer 20

A form of demand in which changes in price do not affect demand

Question 21

law of demand

Answer 21

Economic principle which states that the quantity of a good or service that people will buy varies inversely with the price of the good or service

Question 22

law of supply

Answer 22

Economic principle which states that the quantity of a good or service that will be offered for sale varies in direct relation to its price

Question 23

law of supply and demand

Answer 23

Economic principle which states that the supply of a good or service will increase when demand is great and decrease when demand is low

Question 24

natural resources

Answer 24

Items found in nature that are used to produce goods and services

Question 25

need

Answer 25

Something required or essential that is lacking

Question 26

noneconomic want

Answer 26

Desires for things that can be obtained without spending money

Question 27

opportunity cost

Answer 27

The benefit that is lost when you decide to use scarce resources for one purpose rather than for another

Question 28

price

Answer 28

The amount of money paid for a good, service, or resource

Question 29

production

Answer 29

The economic process or activity of producing goods and services

Question 30

scarcity

Answer 30

A condition resulting from the gap between limited resources and unlimited wants for goods and services

Question 31

supply

Answer 31

The quantity of a good or service that sellers are able and willing to offer for sale at a specified price in a given time period

Question 32

trade-off

Answer 32

Giving up all or a part of one thing in order to get something else

Question 33

want

Answer 33

A desire for something that is not required