Chapter 1 test Flashcards
the method a country uses to answer the three economic questions
economic system
Lady Gaga has $355 to spend. She decided to use the money to buy face paint instead of going to the symphony. Lady Gaga has ________.
made an economic tradeoff
3rd largest producer
Japan
_______ means not having enough resources to satisfy every need
scarcity
not having enough resources to satisfy every need
scarcity
If surplus occurs, what can be done to fix the problem?
lower the price
______ is the process of choosing which wants and needs will be satisfied
economic decision making
What country is the largest producer of goods and services
United States
A demand curve illustrates the relationship between quantity demanded and ____
price
A ____ is anywhere the economic transactions take place
market place
true or false
Both individuals and organizations can be producers
true
List the 6 steps of the decision making process.
- define the problem
- identify the choices
- evaluate the advantages and disadvantages of each choice
- choose one choice
- act on your choice
- review your choice
When many more people wish to purchase a product it’s price will tend to ____
increase
Individuals and organizations that determine what products and services will be available for sale are called ____
producers
Which of the following would an economist most likely classify as a need?
- gasoline for a florist’s delivery truck
- a college degree
- a flat screen tv
- a part time job to earn extra money
gas for a florist’s delivery truck
The primary reason business owners make investments and take risks in a private enterprise economy is to
- make a profit
- satisfy customer needs
- develop new products
- meet government requirements
make a profit
A person who buys or uses goods and services is called a ____
consumer
The money left over from sales after all the costs of operating a business have been paid is called ____
profit
Give examples of capital resources.
money, machinery, investors, equipment, factories, buildings, computers
______ are businesses offering very similar products to the same customers
competitors
____ refers to the quantity of a good or service that businesses are willing and able to provide
supply
Things that are not necessary for survival but add pleasure and comfort to your life are called ____
wants
As competition increases, prices
- usually increase as well
- are not affected so will usually not change
- usually will decrease
- there is no way to predict what will happen to prices due to competition
usually will decrease
Which of the following address the economic question of how to produce?
- growing corn instead of potatoes
- requiring individuals to complete specific types of work
- producing more capital goods and few consumer products
- selling natural resources to other countries
requiring individuals to complete specific types of work
A vacation to Belize would be considered a _____
want
____ are things that are required in order to live
needs
If the quantity of an item supplied is greater than the quantity of an item demanded, a ___ will occur.
surplus
John has two hours before having to go to his part time job. He is deciding between studying for a math exam and taking a nap. If John chooses to take a nap, the opportunity cost of his decision is
- the rest he is getting
- the score he will earn on the math exam
- the wages from his part time job
- all of the above
the score he will earn on the math exam
The US economy is sometimes referred to as _____ or _____
free enterprise or private enterprise
true or false
It is not always easy to determine the products and services that satisfy needs and those that satisfy wants.
true
true or false
The basic economic problem is that consumers have too many products and services to choose from.
false
Give examples of natural resources.
oil, coal, sun, gold, lead, water
Capital resources, human resources and natural resources are considered ______ resources
economic
Give 5 examples of human resources.
construction workers, teachers, entrepreneurs, accountants, doctors, farmers
In a _____ economy the resources are owned and controlled by the government
command
An example of a natural resource is
- sunlight
- a fishing net
- a computer programmer
- money
sunlight
______ is the process of choosing which needs and wants will be satisfied.
economic decision making
A _____ illustrates the relationship between the price of a product or service and the quantity demanded by consumers
demand curve
What is the second step in the decision making process?
identify the choices
The basic economic problem results from ____
scarcity
The decision making process is best to use when
- you already know the choice you will make
- you are facing a decision with several good alternatives
- groups rather than individuals are making a choice
- you don’t have enough money to pay for any of the choices
you are facing a decision with several good alternatives
______ resources include tools and equipment used to produce goods and services
capital
As competition increases, prices will usually ____
decrease
_____ consumes more goods and services than any other country in the world
America
The first step in the decision makign process involves
a. defining the problem
b. setting the goal
c. identifying the choices
d. evaluating alternatives
defining the problem
Most of the nations of the world can be classified as having a _____ economy
mixed
What are the 3 factors that determine market price?
supply, demand, competition
Do businesses and governments deal with scarcity?
Yes, businesses have labor shortages and the government may not collect very many taxes
If a shortage occurs, what can be done to fixe the problem?
increase price
The primary reason why business invest resources and take risks is to ____
earn a profit
In which of the following economic systems is the government’s role greatest?
a. mixed
b. traditional
c. market
d. command
command
The point where supply and demand are equal is called _____
market price / equilibrium
An ____ is a risk taker who uses resources to create a new product or service
entrepreneur
Consumers and businesses make decisions based ont heir own self interests is a characteristic of a ____ economy
market
In order to determine how available resources will be sued to meet the needs and wants of a country, what 3 questions must be answered?
- What to produce?
- How to produce?
- What needs and wants will be satisfied with the goods and services produced?
If the quantity of an item demanded is greater than the quantity of an item supplied, a ____ will occur
shortage
Are human resources necessary in producing and services?
Yes, they have to operate machinery or make decisions
Larry decided to hang out with his friend, Joe, instead of study for his French exam. Larry got an F on the test and wasn’t able to get into the college he wanted. The value of a good grade on Larry’s french exam is known as the ______
opportunity cost
economic resources are also known as _____
factors of production
A _____ is when you give up somethng to have something else
trade off
____ economy is where the resources are owned and controlled by the people of the country
market
What is the purpose of a business?
provide a good or service, satisfy a want or need
What is meant by ‘‘the basic economic problem?”
the mismatch of unlimted wants and needs and the limited economic resources
_____ are activities provided for the satisfaction of others that are consumed at the same time they are produced.
services
The fifth step in the decision making process is _____
act on your choice
Things that satisfy our wants through the efforts of other people or equipment are called _____
services
The first step inthe decision making process is _____
define the problem
Explain 2 reasons why wants are unlimited.
- people change their opinions
- once you satisfy one need, another is usually created
When confronted with the decision to purchase a new pair of boots or go to dinner and a movie with friends the value of the next best alternative not chosen is called the _____
opportunity cost
true or false
Supply is the quantity of a good or service that a consumer is willing and able to buy at a particular price.
false
____ of choice means that you can make economic decisions independently and must accept the consequences of those decisions.
freedom
Another name for the US economic system is ____
capitalism
Natural resources are ____ materials supplied by nature
raw
Things that you can see and touch are called ____
goods
The first step in the decision making process is ____ (think of the chart you created about you and a celebrity)
define the problem
An automatic car wash would be an example of a _____
service / capital resource
The right of ______ means you can own, use or dispose of things of value
private property
The second largest producer of goods and services in the world is ____
China
