Chapter 1

Question 0

Actual tangible things we buy

Answer 0

Goods

Question 1

Must be made between one item in another and must go through a process

The biggest problem in economics

Answer 1

Scarcity

Question 2

In tangible things we buy

Answer 2

Services

Question 3

Natural resources and materials needed to produce

Answer 3

Land

Question 4

Physical work needed to produce

Answer 4

Labor

Question 5

Skills and knowledge education

Answer 5

Human capital

Question 6

Machines and tools buildings

Answer 6

Physical capital

Question 7

The ideas and risks needed to start business

Answer 7

Entrepreneurship

Question 8

Costs you can actually see and Count when you make an economic decision

Answer 8

Explicit cost

Question 9

Hidden costs thought as something that is given up in order to gain something else

Answer 9

Implicit cost

Question 10

Total cost of a decision on next best alternative not chosen

Answer 10

Opportunity cost

Question 11

The amount of happiness gained by making a choice

Answer 11

Utility

Question 12

Allows people to measure the cost of something against the value of the utility gained when the action is taken

Answer 12

Cost-benefit analysis

Question 13

Utility must be equal to or exceed opportunity cost

Answer 13

The maximization rule

Question 14

Getting more output with a lesser amount of inputs

Answer 14

Efficiency

Question 15

When utility is increased due to the mass production of items lowering cost

Answer 15

Economic growth

Question 16

A worker specializes in a specific task in making something or on a specific career

Answer 16

Specialization

Question 17

Dividing the completion of a job into several basic tasks it takes to create something

Answer 17

Division of labor

Question 18

Produced and meant to be consumed or used up

Answer 18

Consumer goods

Question 19

A graphical representation of a society’s total ability to produce using all of its resources

Answer 19

Production possibilities frontier

Question 20

A collection of rules values laws and activities that can help to explain how different societies deal with the basic problem of scarcity

Answer 20

Economic system

Question 21

Economic decisions are made by tradition through past practice over many generations

Answer 21

Traditional economy

Question 22

Major economic decisions are made by central planning Authority

Answer 22

Command economy

Question 23

Economic decisions are made by individuals

Answer 23

Market economy

Question 24

Economy that incorporates parts of all three economic systems

Answer 24

Mixed economy

Question 25

Focuses on facts and cause-and-effect relationships

Answer 25

Positive economics

Question 26

Incorporates value judgments about what the economy should be like or what particular policy action should be recommended to achieve a desirable goal

Answer 26

Normative economics

Question 27

Examines either the economy as a whole or its basic subdivisions or aggregates such as the government household and business sectors

Answer 27

Macroeconomics

Question 28

Part of economics concerned with individual units such as a person a household a firm or an industry

Answer 28

Micro economics