Chapter 1

Question 1

want

Answer 1

a thing that we desire to have

Question 2

resource

Answer 2

anything that can be used to produce goods or services (trees, employees, labor, etc)

Question 3

scarcity

Answer 3

condition in which wants are greater than resources available to satisfy them

Question 4

opportunity cost

Answer 4

the most highly valued opportunity or alternative forfeited when a choice is made.

Question 5

trade-off

Answer 5

a situation in which more of one thing necessarily means less of something else

Question 6

production possiblities frontier

Answer 6

graphic representation of all possible combinations of two goods that an economy can produce

Question 7

rationing device

Answer 7

means for deciding who gets what portion of the available resources and goods

Question 8

economics

Answer 8

science that studied the choices of people trying to satisfy their wants in a world of scarcity,

Question 9

marginal

Answer 9

additional

Question 10

incentive

Answer 10

something that encourages or motivates a person to take action

Question 11

microeconomics

Answer 11

branch of economics that deals with human behavior and choices as they relate to relatively small units—an individual, a business firm, or a single market

Question 12

macroeconomics

Answer 12

the branch of economics that deals with human behavior and choices as they relate to the entire economy

Question 13

theory

Answer 13

an explanation of how something works, designed to answer a question for which there is no obvious answer

Question 14

tangible

Answer 14

able to be felt by touch

Question 15

intangible

Answer 15

not able to be felt by touch

Question 16

goods

Answer 16

anything that satisfies a person’s wants or brings satisfaction; also, tangible products

Question 17

utility

Answer 17

quality of bringing satisfaction or happiness

Question 18

disutility

Answer 18

quality of bringing dissatisfaction or unhappiness

Question 19

services

Answer 19

tasks that people pay others to perform for them

Question 20

land

Answer 20

all the natural resources found in nature.

Question 21

labor

Answer 21

physical and mental talents that people contribute to the production of goods and services

Question 22

capital

Answer 22

produced goods that can be used as resources for further production

Question 23

entrepeneurship

Answer 23

special talent that some people have for searching out and taking advantage of new business opportunities and for developing new products and new ways of doing things.