Econ Test 1

Question 1

Natural Resources

Answer 1

Items provided by nature that can be used to produce goods and provide services

Question 2

Opportunity Cost

Answer 2

The cost of the trade-off, value of the next best alternatives that is given up to obtain the preferred item

potential forgone profit from a missed opportunity—the result of choosing one alternative over another

Question 3

Factors of Production

Answer 3

Land, labor, capitol, entrepreneurship
-Resources needed to produce goods and materials

Question 4

Capital Resources

Answer 4

Materials used to create products

Question 5

Scarcity

Answer 5

Most basic problem of economics; combination of limited resources and unlimited wants

Question 6

Human Resources

Answer 6

Any human effort exerted during production

Question 7

Exchange

Answer 7

Producers and consumers agree to provide one type of item in exchange for another

Question 8

Trade-off

Answer 8

Take opportunity to have something, but sacrificing something for that

Question 9

Economics

Answer 9

the study of the choices people make to satisfy their needs and wants

Question 10

Production Possibility Curve

Answer 10

Model that describes the possible output combinations of two goods based on fixed resources

Question 11

Command Economy

Answer 11

Government answers the 3 basic economic questions/called planned economy

Question 12

Authoritarian Socialism

Answer 12

Economics are owned and controlled by the government for nearly all factors of production; closest to pure command model/communism

Question 13

Capitalism

Answer 13

Individuals own factors of production, closest to pure market economy

Question 14

Mixed Economy

Answer 14

Combined elements of tradition, market, and command economics to answer 3 basic questions

Question 15

Market Economy

Answer 15

Supply and demand answer the 3 economic questions; capitilism

Question 16

Democratic Socialism

Answer 16

Mixed between authoritarian socialism and capitalism; government own some, usually utilities

Question 17

Specialization

Answer 17

focusing on one activity by an individual in production rather than on the whole process

Question 18

Division of Labor

Answer 18

assigning specific tasks to individuals

Question 19

Interdependance

Answer 19

a system by which many companies are economically dependent upon each other

Question 20

Production Possibility Curve to the Right

Answer 20

more resources available

Question 21

Production Possibility Curve to the left

Answer 21

less resources available