Basic Concepts

Question 1

Entrepreneurship

Answer 1

A person who starts a business

Question 2

Economics

Answer 2

the branch of knowledge concerned with the production, consumption, and transfer of wealth.

Question 3

Adam Smith (invisible hand)

Answer 3

a metaphor used by Adam Smith to describe unintended social benefits resulting from individual actions. The phrase is employed by Smith with respect to income distribution (1759) and production (1776)

Question 4

Consumers

Answer 4

A person who uses or consumes foods and services to satisfy his needs and wants

Question 5

Producers

Answer 5

a person who creates economic value, or produces goods and services.

Question 6

Wants vs. needs

Answer 6

Needs would be defined as goods or services that are required. This would include the needs for food, clothing, shelter and health care. Wants are goods or services that are not necessary but that we desire or wish for. For example, one needs clothes, but one may not need designer clothes.

Question 7

Types of unemployment

Answer 7

A

Question 8

durable vs non durable goods

Answer 8

Durable goods are a category of consumer products that do not need to be purchased frequently because they are made to last for a long time (usually lasting for three years or more). They are also called consumer durables or durables.

Question 9

Interest

Answer 9

Payment for the use of capital

Question 10

Three basic economic questions

Answer 10

Who – consumes the goods & services produced in society?
What –goods & services should be produced?
How – should goods & services be produced?

Question 11

Inflation

Answer 11

A general rise in the prices of goods and services throughout the economy

Question 12

Opportunity cost

Answer 12

The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.

Read more: http://www.investopedia.com/terms/o/opportunitycost.asp#ixzz3Y8aorbaQ
Follow us: @Investopedia on Twitter

Question 13

Marginal cost

Answer 13

marginal cost is the change in the total cost that arises when the quantity produced has an increment by unit. That is, it is the cost of producing one more unit of a good.

Question 14

Scarcity

Answer 14

the state of being scarce or in short supply; shortage.

Question 15

Gdp

Answer 15

Gross domestic product- the total dollar value of all final goods and services produced and sold in the U.S. In a year

Question 16

Public goods

Answer 16

A product that one individual can consume without reducing its availability to another individual and from which no one is excluded. Economists refer to public goods as “non-rivalrous” and “non-excludable”.

Question 17

Private goods

Answer 17

A product that must be purchased in order to be consumed, and whose consumption by one individual prevents another individual from consuming it. Economists refer to private goods as “rivalrous” and “excludable”.

Question 18

Imports

Answer 18

bring (goods or services) into a country from abroad for sale.

Question 19

Exports

Answer 19

send (goods or services) to another country for sale.

Question 20

Factors of Production

Answer 20

The resources people have for producing goods and services to satisfy their wants ( land labor capital)