Chapter 1 Vocab

Question 1

Agricultural Economics

Answer 1

An applied social science that deals with how producers, consumers, and societies use scarce and natural resources in the production, processing, marketing, and consumption of food and fiber products

Question 2

Biological resources

Answer 2

Scarce resources such as livestock, wildlife, and different genetic varieties of crops.

Question 3

Capital

Answer 3

Also know as manufactured resources

Examples include machines, equipment, and a product that has not been used in the year it was made

Question 4

Capitalism

Answer 4

The free market economic system in which individuals own resources and have the right to employ their time and resources however they choose, with minimal legal constraints from the government

Prices signal the value of resources and economic goods (supply and demand)

Question 5

Communism

Answer 5

A type of economic system in which resources are generally collectively owned and the government decides how human and nonhuman resources are to be utilized across the various sectors of the economy

Used in places such as North Korea

Question 6

Economics

Answer 6

A social science that deals with how consumers, producers, and societies choose among the alternative uses of scarce resources in the process of producing, exchanging, and consuming goods and services

Question 7

Fallacy of Composition

Answer 7

What is true in an individual situation is not necessarily true for a large population

Doubling your wheat production is good for you, but if everyone does it, wheat becomes less valuable.

Question 8

Food and fiber system

Answer 8

An example of microeconomics.

Has issues related to resource use in production, processing, distribution, and consumption of products in this markets

Question 9

Human Resources

Answer 9

Services provided by laborers and management to the production of goods and services that are also considered scarce

Question 10

Macroeconomics

Answer 10

A branch of economics that focuses on broad aggregates such as the growth of the nation’s gross domestic product (GDP), the gaps between the economy’s potential GDP and its current GDP, and trade-offs between unemployment and inflation.

Question 11

Management

Answer 11

Another form of human resource, provides entrepreneurial services, which may entail the formation of a new firm, the renovation or expansion of an existing firm, the taking of financial risks, and the supervision of the use of the firm’s existing resources so that its objectives can be met.

Question 12

Manufactured resources

Answer 12

A category of scarce resources

Examples are machines, equipment, and structures

Also known as capital

Question 13

Microeconomics

Answer 13

A branch of economics that focuses on the economic actions of individuals or specific groups of individuals

Question 14

Mixed economic system

Answer 14

Markets are not entirely free to determine price in some markets, but are free in others

The United States is an example of this economic system

Question 15

Natural resources

Answer 15

A scarce resource

Examples of this are land and mineral deposits

Question 16

Normative economics

Answer 16

Focuses on “What should be?” or “What ought to be?” questions.

Question 17

Opportunity cost

Answer 17

Refers to the implicit cost associated with the next best alternative in a set of choices available to decision makers

Do the economic benefits of one choice exceed the costs, including the forgone income associated with the next best alternative

Question 18

Positive economics

Answer 18

Focuses on “what is…?” and “What if…?” questions

Question 19

Scarce resources

Answer 19

Resources with only a limited quantity available

Can be broken down into the following categories 1) natural and biological resources; 2) Human Resources; and 3) manufactured resources

Question 20

Scarcity

Answer 20

A relative concept that refers to the fixed quantity of resources that are available to meet societal needs.

Question 21

Socialism

Answer 21

Winston Churchill called this “a philosophy of failure, the creed of ignorance, and the gospel of envy; it’s inherent virtue is the equal sharing of misery”

A type of economic system in which resources are generally collectively owned and the government decides how human and nonhuman resources are to be utilized across the various sectors of the economy

Question 22

Specialization

Answer 22

Focusing the use of out resources on a specific task

Ex: Idaho making a bunch of potatoes, and choosing to import wheat and oranges from somewhere else