Econ Test 1

Question 1

What is the definition of Economics?

Answer 1

The study of how people make choices without unlimited wants and needs with limited resources

Question 2

What is Micro Economics?

Answer 2

Study of a small group or individual making choices.

Question 3

What is Macro Economics?

Answer 3

Study of a large group or companies making choices.

Question 4

Biggest problem facing society?

Answer 4

Scarcity

Question 5

Definition of Scarcity?

Answer 5

Unlimited wants and needs met with limited resources

Question 6

Wants

Answer 6

Desired; satisfaction

Question 7

Needs

Answer 7

Required; survival

Question 8

What is Opportunity Cost?

Answer 8

The next best thing you gave up

Question 9

What is utility?

Answer 9

Satisfaction or Usefulness

Question 10

What is utility maximization?

Answer 10

doing what benefits you and costs the least

Question 11

General Economics Idea

Answer 11

Idea that people, when behaving rationally, will do what they get the most benefit from and that costs them the least

Question 12

Basic Economic Questions

Answer 12

What to produce?
How to produce?
Who to produce for?

Question 13

What to produce?

Answer 13

Guns/butter

Question 14

How to produce?

Answer 14

quality or quantity

Question 15

Who to produce for?

Answer 15

Target market

Question 16

What is economic concerned with?

Answer 16

Transferable to others

Question 17

Goods

Answer 17

an item; useful or satisfies

Question 18

Consumer Goods

Answer 18

for final use; ex) pencil

Question 19

Durable Good

Answer 19

last long; ex) furniture

Question 20

Non-Durable Goods

Answer 20

wear out; ex) shoes, food, etc.

Question 21

Market

Answer 21

is a location or other mechanism that allows buyers and sellers to exchange a certain economic product

Question 22

Factor Market

Answer 22

where factors of production are brought and sold

Question 23

Product Markets

Answer 23

where producers sell their goods and consumers buy

Question 24

Value

Answer 24

refers to a worth that can be expressed in dollars and cents

Question 25

Paradox of Value

Answer 25

situation where necessities, water, have little monetary value, whereas non-necessities, diamonds have a higher value

Question 26

Wealth

Answer 26

accumulation of products that are tangible, scarce, useful, and transferable

Question 27

Gross Domestic Product

Answer 27

all the stuff produced within a nation

Question 28

Gross National Product

Answer 28

around the world

Question 29

Economic Growth

Answer 29

occurs when a nations total output of goods and services increases over time

Question 30

Productivity

Answer 30

measure of the amount of output produced by a given amount of inputs

Question 31

Division of Labor

Answer 31

first developed by adam smith

Question 32

Specialization

Answer 32

people puting on tires

Question 33

Productivity Definition

Answer 33

comes from investments in human capital, or the sum of the skills, abilities, health, and motivation of people

Question 34

Factors of Production Definition

Answer 34

resources are things we need to make other products

Question 35

Factors of Production

Answer 35

land, labor, capital, and entrepreneurship

Question 36

Gifts of nature refers to?

Answer 36

Wind, Water, Wood, Rocks, Etc.

Question 37

Labor

Answer 37

peoples ability to work; ex) mowers

Question 38

Capital

Answer 38

any of the tools used to produce goods and services

Question 39

Production Possibilities Curve (or frontier)

Answer 39

model that shows alternative way that an economy can use its scarce resources

Question 40

PPC Key Assumptions

Answer 40

only 2 goods can be produced full employment of resources fixed resources fixed technology

Question 41

Constant Opportunity Cost

Answer 41

Resources are easily adaptable for producing either good

Question 42

Law of increasing opportunity cost

Answer 42

as you produce more of any good, the opportunity cost (forgone production of another good) will increase

Question 43

Three shifters of the PPC

Answer 43

change in resources; quality or quantity change in technology change in trade

Question 44

Capital goods and future growth

Answer 44

countries that produce more capital goods will have more growth in the future