Economy Section 1

Question 1

Need

Answer 1

something essential for survival

Question 2

Want

Answer 2

something that we desire but is not necessary for survival

Question 3

Goods

Answer 3

physical projects 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 and services are available to meet unlimited wants

Question 6

Shortages

Answer 6

when consumers want more of a good or service than producers are willing to make for a certain price.

Question 7

Factors of Production

Answer 7

the resources used to make a good or service

Question 8

Entrepreneurs

Answer 8

people who decide how to combine resources to create new goods or services

Question 9

Capital

Answer 9

any human made resource that is used to produce other goods and services

Question 10

Physical Capital

Answer 10

human made objects used to create other goods and services

Question 11

Human Capital

Answer 11

knowledge and skills a worker gains through educational and experiences

Question 12

Microecomonics

Answer 12

Study of small economical units

Question 13

Macroeconmocis

Answer 13

Study of large economy as a whole

Question 14

Economic Assumptions

Answer 14

Societies wants are unlimited, all resources are limited
Every choice has a cost because of scarcity
Everyone goal is to make choices that maximize their satisfaction, work on their own self interest
Everyone acts rationally when comparing marginal costs and marginal benefits
Real life situations can be explained and analyzed through simplified models and graphs

Question 15

Trade Off

Answer 15

Every choice has a cost

Question 16

Opportunity Cost

Answer 16

The most desirable alternative given up as a result of a decision

Question 17

Cost/Benefit Analysis

Answer 17

A decision making process in which you compare what you will sacrifice and gain by a specific action