Economy 1

Question 1

Need

Answer 1

Something essential to survive

Question 2

Want

Answer 2

Something that we desire but that is not necessarily essential to survive

Question 3

Goods

Answer 3

Physical objects that someone produces

Question 4

Services

Answer 4

actions or activities that one person performs for another

Question 5

Scarcity

Answer 5

Limited amounts of goods/services are available to meet unlimited wants

Question 6

Economics

Answer 6

The study of how people seek to satisfy their needs and wants by making choices

Question 7

Shortage

Answer 7

when consumers want more of a good/service than a producer is willing to make available at a particular price

Question 8

Entrepreneur

Answer 8

Are people who decide how to combine resources to create new goods and services

Question 9

Factors of production

Answer 9

The resources used to make all goods and services

Question 10

Land

Answer 10

All natural resources (everything that can be found in the nature) used to produce goods and services

Question 11

Labor

Answer 11

The effort people devote to task for which they are paid.

Question 12

Capital

Answer 12

Refers to any human made resource that is used to produce other goods

Question 13

Physical capital

Answer 13

Human made objects, (machines, tools, equipment)

Question 14

Human Capital

Answer 14

The manufacturing, education, knowledge, skills and experience workers gain

Question 15

Trade off

Answer 15

giving up the benefit in order to gain another

Question 16

Opportunity cost

Answer 16

the most desirable alternative somebody gives up as the result of a decision

Question 17

thinking at the margin

Answer 17

analyzing how much or less to do

Question 18

Cost/benefit analysis

Answer 18

analyzing the pros and cons of all the options of a decision

Question 19

Marginal cost

Answer 19

the extra cost of adding one unit

Question 20

Marginal benefits

Answer 20

the extra benefit of adding the same unit

Question 21

Production Possibilities curve

Answer 21

Is a graph that shows alternative ways to use an economy’s productive services

Question 22

Production possibilities frontier

Answer 22

shows different ways that a country could use their resources to produce both products and services

Question 23

efficiency

Answer 23

Is the use of resources in such a way as to maximize the output of goods and services

Question 24

Underutilization

Answer 24

Any point INSIDE the production possibilities frontier

Question 25

Law of creasing costs

Answer 25

States that the shift of making on product to another require more resources therefore the opportunity cost increases