Chapter 5 Terms

Question 1

an increase in the quantity of goods and services a nation can produce

Answer 1

Economic growth

Question 2

the production of more goods and ser­vices because business firms are using more land, labor, or financial capital

Answer 2

Extensive growth

Question 3

the production of more goods or services by using existing factors of production with greater efficiency

Answer 3

Intensive growth

Question 4

items that are purchased for personal use

Answer 4

Consumer goods

Question 5

items that are used to produce consumer
goods; also called real capital

Answer 5

Capital goods

Question 6

the allocation of limited resources to produce either consumer goods or capital goods

Answer 6

consumer goods/capital goods tradeoff

Question 7

describes a business firm that uses a great deal of human labor relative to real capital

Answer 7

Labor intensive

Question 8

describes a business firm that uses more automated equipment than human labor

Answer 8

Capital intensive

Question 9

a viewpoint maintaining that each person in the nation has a right to a part of the nation’s wealth simply because he is a part of the human race

Answer 9

egalitarian fairness

Question 10

an equal distribution of the nation’s income regardless of each person’s ability to contribute to its pool of wealth

Answer 10

economic leveling

Question 11

a viewpoint maintaining that the only economic right to which citizens are entitled is the right to own and use property free of governmental interference and that the accumulation of wealth is the sole responsibility of each individual

Answer 11

libertarian fairness

Question 12

another name for the libertarian view of economic fairness allowing for a “survival of the fittest” in the accumulation of wealth

Answer 12

economic Darwinism