Chapter 3

Question 1

The body of knowledge that relates to producing and using goods and services

Answer 1

economics

Question 2

the desire for scarce materials

Answer 2

economic wants

Question 3

the desire for non-scarce materials

Answer 3

non-economic wants

Question 4

the ability to satisfy a want or need

Answer 4

utility

Question 5

anyone who creates a utility

Answer 5

producer

Question 6

used in creating goods and services

Answer 6

factors of production

Question 7

anything provided by nature that affects the productive capability of a country

Answer 7

natural resources

Question 8

human effort, either physical or mental, that goes into producing goods or services

Answer 8

labor

Question 9

the accumulated knowledge and skills of human beings

Answer 9

human capital

Question 10

goods used to produce consumer goods, like land, buildings, tools, machines

Answer 10

capital goods

Question 11

the production of capital goods

Answer 11

capital formation

Question 12

goods and services that directly satisfy consumer wants and needs

Answer 12

consumer goods

Question 13

an organized way for a country to decide how to use its productive resources

Answer 13

economic system

Question 14

an economic system in which individual buying decisions determine what, how and for whom goods and services will be produced

Answer 14

market economy

Question 15

an economic system in which a central planning authority owns most of the factors of production

Answer 15

command economy

Question 16

an economic system that uses aspects of both a market and command economy

Answer 16

mixed economy

Question 17

the transfer of authority to provide a good or service from government to individual

Answer 17

privatization

Question 18

an economic political system in which private citizens are free to go into business for themselves, produce whatever they like and distribute it

Answer 18

capitalism

Question 19

an economic political system in which the government controls the use of the country’s factors of production

Answer 19

socialism

Question 20

extreme socialism

Answer 20

communism

Question 21

items of value that individuals have the right to own, use and sell

Answer 21

private property

Question 22

incentive for producing goods and services

Answer 22

profit

Question 23

the number of items that will be bought at a given time at a given price

Answer 23

demand

Question 24

the number of items that will be offered for sale at a particular time and at a certain price

Answer 24

supply

Question 25

rivalry among sellers for a consumers dollar

Answer 25

competition