Econ Chapter 1

Question 1

Something essential for survival

Answer 1

Need

Question 2

Something that we desire but that is not necessary for survival

Answer 2

Want

Question 3

Physical objects that someone produces

Answer 3

Goods

Question 4

Actions or activities that one person performs for another

Answer 4

Services

Question 5

The fact that limited amounts of goods and services are available to meet unlimited wants

Answer 5

Scarcity

Question 6

The study of how people seek to satisfy their needs and wants by making choices

Answer 6

Economics

Question 7

When consumers want more of a good or service than producers are willing to make available at a particular price

Answer 7

Shortage

Question 8

A person who decides how to combine resources to create new goods and services

Answer 8

Entrepreneur

Question 9

The resources used to make all goods and services

Answer 9

Factors of production

Question 10

All natural resources used to produce goods and services

Answer 10

Land

Question 11

The effort people devote to tasks for which they are paid

Answer 11

Labor

Question 12

Any human-made resource that is used to produce other goods and services

Answer 12

Capital

Question 13

Human-made objects used to create other goods and services

Answer 13

Physical capital

Question 14

The knowledge and skills a worker gains through education and experience

Answer 14

Human capital

Question 15

Products needed to make goods and services

Answer 15

Capital goods

Question 16

The act of giving up one benefit in order to gain another, greater benefit

Answer 16

Trade-off

Question 17

The most desirable alternative somebody gives up as the result of a decision

Answer 17

Opportunity cost

Question 18

Deciding how much more (or how much less) to do

Answer 18

Thinking at the margin

Question 19

A systematic approach to estimating the strengths and weaknesses of alternatives

Answer 19

Cost/benefit analysis

Question 20

The extra cost of adding one unit

Answer 20

Marginal cost

Question 21

The extra benefit of adding one unit

Answer 21

Marginal benefit

Question 22

A graph that shows alternative ways to use an economy’s productive resources

Answer 22

Production possibilities curve

Question 23

A graph that shows all the different combinations of output of two goods that can be produced using available resources

Answer 23

Production possibilities frontier

Question 24

The use of resources in such a way as to maximize the output of goods and services

Answer 24

Efficiency

Question 25

The use of fewer resources than the economy is capable of using

Answer 25

Underutilization

Question 26

States that as production shifts from making one item to another, more and more resources are necessary to increase production of the second item

Answer 26

Law of increasing costs

Question 27

Anything that helps to produce goods at a better quality, faster, or cheaper

Answer 27

Technology

Question 28

What are the four main factors of production?

Answer 28

Land, Labor, Capital, and Entrepreneurs