Ch 2 - The US Economy: A Global View

Question 1

gross domestic product (GDP)

Answer 1

the total market value of all final goods and services produced within a nation’s borders in a given time period

Question 2

per capita GDP

Answer 2

the dollar value of GDP divided by total population; average GDP

Question 3

economic growth

Answer 3

an increase in output (real GDP); an expansion of production possibilities

Question 4

factors of production

Answer 4

resource inputs used to produce goods and services, such as land, labor, capital, entrepreneurship

Question 5

human capital

Answer 5

the knowledge and skills possessed by the workforce

Question 6

capital-intensive

Answer 6

production processes that use a high ratio of capital to labor inputs

Question 7

productivity

Answer 7

output per unit of input, such as output per labor-hour

Question 8

externalities

Answer 8

costs (or benefits) of a market activity borne by a third party

Question 9

monopoly

Answer 9

a firm that produces the entire market supply of a particular good or service

Question 10

income quintile

Answer 10

one-fifth of the population; rank-ordered by income (e.g., top fifth)

Question 11

what America has / produces

Answer 11

12% of world’s arable land, < 5% of world’s population, produces > 20% of world’s output

Question 12

technological advance

Answer 12

finding new and better ways to produce goods and services

Question 13

role of government

Answer 13

provide legal framework, protect environment, protect consumers, protect labor

Question 14

capital stock

Answer 14

machinery, factories, buildings - US has over $50T