Ch 1 Flashcards
Which of the following might prevent individuals and firms from providing goods normally? (Choose all that apply)
A. Innovation
B. Non-profit goals
C. An entertainment event
D. Government intervention
E. Market failure
F. High product demand
A, B, D, E
Which of the following are unprofitable ideaas that could be a goal other than profit?
A. Promoting social justice
B. Creating art
C. Expanding the product market
D. Building revenue over cost
A, B
When we weight the costs and benefits of daily decisions, we are considering the economic ___ involved.
Trade-off
A situation in which resources are used in the most productive way possible to produce the goods and services that have the greatest economic value to society is called…
efficiency
Increasing ___ means finding a way to better use resources to produce the things that people want.
efficiency
___ is the study of how best to allocate scarce resources among competing uses.
Economics
___ is the study of individuals and firms whereas ___ is the study of the economy on a regional, national, or international level.
Microeconomics; macroeconomics
A person who demonstrates ___ compares all available choices and purposefully behaves in the way that will best achieve their goals.
rational behavior
___ is the lack of enough resources to satisfy all desired uses of those resources.
Scarcity
What are the four main decision making questions when starting a business?
- What are the wants and constraints? (Scarcity)
- What are the tradeoffs? (Opportunity costs)
- How will others respond? (Incentives)
- Why isn’t everyone doing it? (Marginal)
What are the 3 main factors of production?
Land, labor, capital
___ economics involve questions such as “what is?” whereas ___ economics involve questions such as “what ought to be?”
Positive; normative
___ describes a situation in which resources are used in the most productive way possible to produce the goods and services that have the greatest total economic value to society.
Efficiency
