Econ Unit 1

Question 1

4 factors of production

Answer 1

land, labor, capital, entrepreneurship

Question 2

3 economic questions

Answer 2

what, how, for whom

Question 3

paradox of value

Answer 3

scarce things are more expensive

Question 4

GDP

Answer 4

(gross domestic product) total monetary value of goods and services produced within a country’s boarders

Question 5

command economy

Answer 5

everything determined by government

Question 6

traditional economy

Answer 6

relies on traditions and cultural beliefs

Question 7

free enterprise

Answer 7

private businesses in competition with government to regulate

Question 8

free market

Answer 8

unrestricted competition between privately owned businesses

Question 9

capital goods

Answer 9

used to produce other goods

Question 10

durable goods

Answer 10

last over 3 years

Question 11

nondurable goods

Answer 11

regularly consumed

Question 12

scarcity

Answer 12

when the want for a good exceeds the supply

Question 13

opportunity cost

Answer 13

loss of potential gain from one alternative when another is chosen

Question 14

productivity possibility fronteir

Answer 14

illustrates possible productivity outcomes in terms of good production vs. time

Question 15

sole proprietorship

Answer 15

sole responsibility for debts but can manage however you want

Question 16

partnership

Answer 16

split duties and responsibility but conflicts can arise

Question 17

corporation

Answer 17

easy to access capital but more complicated to form

Question 18

vertical merger

Answer 18

companies in different stages of manufacturing or marketing join together

Question 19

horizontal merger

Answer 19

firms that produce the same kind of product merge together

Question 20

non-profits

Answer 20

operate to promote the collective interests of their members rather than to seek financial gain for their owners

Question 21

minimum wage

Answer 21

motivates people to work but puts strain on businesses

Question 22

who regulates corporations and the sale of stock

Answer 22

the securities and exchange commission (SEC)

Question 23

corporation that has manufacturing or service operations in multiple countries

Answer 23

multinational

Question 24

non-cash charge a firm takes for the wear and tear on capital goods

Answer 24

depreciation

Question 25

conglomerate

Answer 25

a corporation made up of several independent businesses