Chapter 1

Question 1

The study of how humans make decisions in the face of scarcity is known as

Answer 1

Economics

Question 2

Economics acknowledges

Answer 2

that the production of useful goods and services can create problems of environmental pollution

Question 3

Economics looks at how

Answer 3

government spending, taxes and regulations affect decisions about production and consumption

Question 4

Economics recognizes that

Answer 4

every decision involves trade-offs

Question 5

when the human wants for goods, services, and resources exceed what is available is known as

Answer 5

Scarcity

Question 6

the ultimate scarce resource is

Answer 6

time

Question 7

An economy that is self-sufficient, has little economic growth, where what you produce is what you consume, and organizes economic affairs through tradition is called a? List some examples.

Answer 7

Traditional Economy ex.Asia, Africa, and South America

Question 8

An economy that operates off more govt control, govt owns resources, little private property, health care is provided by govt , and the govt decides what goods and services will be produced and what prices to charge them for is called a ? List some examples

Answer 8

Command Economy ex. Cuba and North Korea

Question 9

An economy where people have more control, have few regulations, little govt control, private property, high inequality, and brings together buyers and sellers of goods and services is called a ? List some examples

Answer 9

Market Economy ex. United States

Question 10

An economy that includes elements of both command and market economy is called a ? List some examples.

Answer 10

Mixed Economy ex.Europe and Latin America

Question 11

most countries around the world are what type of economy

Answer 11

Mixed

Question 12

Data is very important in economics because it…

Answer 12

describes and measures the issues and problems that economies seek to understand

Question 13

Black markets are? What type of economies tend to have black markets

Answer 13

are underground economies where buyers and sellers make transactions without govt approval, they are most often in heavy regulated economies

Question 14

an increase in the international exchanges in goods and services, capital and labor expanding political and economic connections between people all around the world is known as…

Answer 14

Globalization

Question 15

Exports are..

Answer 15

goods and services that one produces domestically and sells abroad

Question 16

Imports are…

Answer 16

goods and services that one produces abroad and then sells domestically

Question 17

A theory is a..

Answer 17

simple representation of how 2 variables interact with each other

Question 18

The purpose of a theory is to

Answer 18

take a complex real world issue and simplify it

Question 19

a good theory is ______ enough to understand, while _______ enough to capture key features of the situation

Answer 19

simple; complex

Question 20

What do economists use to test theories?

Answer 20

models

Question 21

Factory workers dividing tasks to produce a good or service, instead of all the tasks being done by the same person is known as..

Answer 21

Division of Labour

Question 22

Specialization is when…

Answer 22

Workers focus on creating simpler tasks within a complex process

Question 23

What is the opposite of specialization?

Answer 23

Self-sufficiency

Question 24

Specialization allows for?

Answer 24

an individual to learn their tasks better, for companies to save and invest more money with machinery, for an increase in overall production, for the specialized workers who know their job well enough to suggest innovative ways to do their work better, allows businesses to take advantage of economies of scale

Question 25

“as the level of production increases, the cost of producing each individual unit declines” is what

Answer 25

Economies of Scale

Question 26

what 2 things are a force against scarcity?

Answer 26

division and specialization of labour

Question 27

Microeconomics focuses on

Answer 27

the actions and behavior of individuals or companies when their actions concern a group of people such as low income families, workers, households, business, etc.

Question 28

Microeconomics and Macroeconomics are not separate subjects but rather

Answer 28

complementary

Question 29

The mircodecisions of individual businesses are influenced by

Answer 29

whether the macroeconomy is healthy

Question 30

Small economies should take advantage of the

Answer 30

international trade in specialization

Question 31

who was the individual who believed economics teaches you how to think, not what to think, and believed in an active role in govt during times of recession

Answer 31

John Keynes

Question 32

Which individual introduced the concept of division of labour, and is the father of economics

Answer 32

Adam Smith