Chapter 1

Question 0

Want

Answer 0

A desire that’s not necessary

Question 1

Need

Answer 1

Something essential for survival

Question 2

Economics

Answer 2

A science that deals with resources for fulfilling needs and wants

Question 3

Goods

Answer 3

The physical objects that someone produces

Question 4

Services

Answer 4

The actions or activities that one person performs for another

Question 5

Scarcity

Answer 5

limited amounts of goods/services are available to meet unlimited wants

Question 6

Shortage

Answer 6

A situation in which consumers want more of a good or service than producers are willing to make available at a particular time

Question 7

Factors of production

Answer 7

Land labor capital (entrepreneurs): the three groups of resources that are used to make all goods and services

Question 8

Land

Answer 8

Natural resource used to make goods or services

Question 9

Labor

Answer 9

The effort that people devote to a task for which they paid

Question 10

Capital

Answer 10

Any human made resource that is used to produce other goods and services

Question 11

Physical capital

Answer 11

Objects that are used to produce other goods

Question 12

Human capital

Answer 12

Knowledge or skills workers get from education and experience

Question 13

Entrepreneur

Answer 13

Person who takes a risk in combining the other 3 factors to create a new good

Question 14

Trade off

Answer 14

The act of giving up one benefit in order to gain another greater benefit

Question 15

Guns or butter

Answer 15

Military good produces more than consumer goods

Question 16

Opportunity cost

Answer 16

The most desirable thing you give up

Question 17

Thinking at the margin

Answer 17

Deciding whether to do/use 1 additional unit of some resource

Question 18

Production possibilities curve

Answer 18

Graph that shows alternative ways to use an economy’s productive resources

Question 19

Production possibilities frontier

Answer 19

A line on a production curve that shows the maximum possible output an economy can produce

Question 20

Efficiency

Answer 20

To use the resources in such a way as to maximize the output of goods and services

Question 21

Underutilization

Answer 21

The use of fewer resources than an economy is capable of using

Question 22

Cost

Answer 22

Money,time etc

Question 23

Law of increasing cost

Answer 23

An economic principle which states that as production shifts from making one good or service to another, more and more resources are needed to increase production of the second good or service