Economics Unit 1

Question 1

what is microeconomics?

Answer 1

study of decision making of small groups/individuals

Question 2

what is macroeconomics?

Answer 2

decision making of large group/countries

Question 3

what are the four factors of production?

Answer 3

land, labor, capital

Question 4

define economics

Answer 4

how people use scarce and limited resources to satisfy wants and needs

Question 5

describe a want

Answer 5

way of expressing a need

Question 6

describe a need

Answer 6

basic requirement for survival

Question 7

what makes an item scarce?

Answer 7

limited in quantity, desired, useful in more than one way

Question 8

what is utility?

Answer 8

the amount of usefulness or satisfaction we get from something

Question 9

define marginal utility

Answer 9

the extra amount of enjoyment we get from an extra item

Question 10

what is an example of marginal utility?

Answer 10

another slice of pizza, watch another tv show

Question 11

what is diminishing marginal utility?

Answer 11

explains that we as consumers will appreciate something less and less the more we use or acquire

Question 12

why is there no such thing as a free lunch?

Answer 12

opportunity cost

Question 13

describe opportunity cost

Answer 13

cost of the next best alternative use of money, time or resources

Question 14

what are entrepreneurs?

Answer 14

risk takers who start a business

Question 15

describe a good

Answer 15

an economic good that is tangible. It satisfies a want or need

Question 16

what is work performed for someone?

Answer 16

service

Question 17

what is value determined by?

Answer 17

scarcity and how much the item is desired

Question 18

describe consumer goods

Answer 18

stuff you buy to use for yourself

Question 19

describe capital good

Answer 19

things that can be used to make consumer goods

Question 20

what is the difference between durable/non durable goods?

Answer 20

durable goods are items that can last 3 years or more

Question 21

what is wealth?

Answer 21

the accumulation of those products that are tangible, scarce, useful and transferable from one person to another

Question 22

define law of comparative advantage

Answer 22

an individual, firm or region with the lowest opportunity cost of producing good should specialize in that good

Question 23

define absolute advantage

Answer 23

the ability to produce something using fewer resources than other producers

Question 24

what is an example of diminishing marginal utility?

Answer 24

The 5th slice of pizza isn’t as good as the first or second slice

Question 25

what is value?

Answer 25

the scarcity or utility of an item