Economics Ch 1-2

Question 1

actions that can satisfy people’s wants or needs

Answer 1

Services

Question 2

amount earned after a business subtracts its costs from its revenues

Answer 2

profit

Question 3

basic economic problem that results from a combination of limited resources and unlimited wants

Answer 3

scarcity

Question 4

desire to make money that motivates people to produce and sell goods and services

Answer 4

profit incentive

Question 5

economic system in which the government minimizes its interference in the economy

Answer 5

laissez-faire

Question 6

human effort directed toward producing goods and services

Answer 6

work

Question 7

natural resources, surface land and water

Answer 7

land

Question 8

previously manufactured goods used to make other goods and services

Answer 8

capital

Question 9

resources of land, labor, capital, and entrepreneurship used to produce goods and services

Answer 9

factors of production

Question 10

rivalry among producers or sellers of similar goods and services to win more business

Answer 10

competition

Question 11

sacrificing one good or service in order to purchase or produce another

Answer 11

trade-off

Question 12

system in which individuals own the factors of production

Answer 12

Capitalism (Market Economy)

Question 13

system in which the government controls the factors of production and makes all decisions about their use

Answer 13

Command Economy (Communism)

Question 14

tangible objects that can satisfy people’s wants or needs

Answer 14

goods

Question 15

the amount of output (goods and services) that results from a given level of inputs (land, labor, capital, and entrepreneurship)

Answer 15

productivity

Question 16

the material well-being of an individual, group, or nation measured by how well their necessities and luxuries are satisfied

Answer 16

standard of living

Question 17

the process of freely exchanging goods and services between buyers and sellers

Answer 17

market

Question 18

the production and distribution of goods and services in a society

Answer 18

economy

Question 19

the use of science to develop new products and new methods for producing and distributing goods and services

Answer 19

technology

Question 20

whatever is owned by individuals rather than government

Answer 20

private property

Question 21

when individuals take risks to develop new products and start new businesses in order to make profits

Answer 21

entrepreneurship

Question 22

value of the next best alternative given up for the alternative that was chosen

Answer 22

opportunity cost