Chapter 1

Question 1

Good

Answer 1

Anything from which individuals receive utility or satisfaction

Question 2

Utility

Answer 2

The satisfaction one receives from a good

Question 3

Bad

Answer 3

Anything from which individuals receive disutility or dissatisfaction

Question 4

Land

Answer 4

All natural resources, such as minerals, forests, water, and unimproved land

Question 5

Labor

Answer 5

The work brought about by the physical and mental talents that people contribute

Question 6

Capital

Answer 6

Produced goods, such as factories, machinery, tools, computers, and buildings, that can be used as inputs for further production

Question 7

Entrepreneurship

Answer 7

The talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things

Question 8

Scarcity

Answer 8

The condition in which our wants are greater than the limited resources available to satisfy those wants

Question 9

Economics

Answer 9

The science of scarcity; the science of how individuals and societies deal with the fact that wants are greater than the limited resources available to satisfy those wants

Question 10

Rationing Device

Answer 10

A means for deciding who gets what of available resources and goods

Question 11

Opportunity cost

Answer 11

The most highly valued opportunity or alternative forfeited when a choice is made: There is no such thing as a free lunch.