Final Exam Review

Question 1

What are needs?

Answer 1

Things necessary for survival

Question 2

What is the situation that exists when there are not enough resources to meet the wants of the people

Answer 2

Scarcity

Question 3

The study of how people choose to use scarves resources to satisfy their wants

Answer 3

Economics

Question 4

Three questions that scarcity leads to

Answer 4

What will be produced?
How will it be produced?
For whom will it be produced?

Question 5

Four factors of production

Answer 5

1. Land - all natural resources that are used to produce goods
2. Labor - all human time and effort that goes into making products
3. Capital - all resources made and used by people
4. Entrepreneurship - combination of vision skill ingenuity and willingness to create and run a new business

Question 6

What is real capital

Answer 6

Money that is made from goods and services

Question 7

Human capital?

Answer 7

The knowledge and skills gained through experience

Question 8

Benefits offered to encouraged people to act in certain ways

Answer 8

Incentives

Question 9

Making decisions according to what you believe is the best combination of cost and benefits

Answer 9

Economize

Question 10

What is opportunity cost?

Answer 10

Anything you give up to get something else

Question 11

Cost benefit analysis?

Answer 11

The practice of examine the cost and expected benefits of choice

Question 12

What is marginal cost?

Answer 12

Additional cost of using one more unit of a product

Question 13

Additional satisfaction from using one or more unit of product

Answer 13

Marginal benefit

Question 14

Production possibilities curve?

Answer 14

A graph used to show the impact of scarcity of an economy

Question 15

Four assumptions made for the PPC

Answer 15

1. Resources are fixed
2. All resources are fully employed
3. Only two things can be produced
4. Technology is fixed

Question 16

What is efficiency?

Answer 16

The condition in which economic resources are being used to produce the maximum amount of goods And services

Question 17

The condition in which Econ resources are not being used to their full potential

Answer 17

Underutilization

Question 18

What are Statistics

Answer 18

Info in numerical form

Question 19

What is a graph

Answer 19

A visual representation of numerical relationships

Question 20

Microeconomics?

Answer 20

Study of individuals, families, and businesses in an economy

Question 21

Macroeconomics is…

Answer 21

Study of economy as a whole and is concerned with large-scale economic activity

Question 22

A way of describing and explaining economics as it is not as it should be

Answer 22

Positive economy

Question 23

Way of describing and explaining what Econ behavior ought to be not what actually is

Answer 23

Normative economy

Question 24

Who published the wealth of nations?

Answer 24

Adam smith

Question 25

What idea did the wealth of nations support?

Answer 25

Free trade

Question 26

Three basic types of Econ systems

Answer 26

Traditional, command, and market

Question 27

What are wants?

Answer 27

Desires that can be satisfied by consuming a good or service

Question 28

Advantages of traditional economy

Answer 28

Produces what best ensures it's survival The method of production stays the same Distribution is based on customs and traditions

Question 29

Disadvantages of traditional economy

Answer 29

They resist change People are restricted from what the want to do They have a much lower standard of living

Question 30

When a central government makes all economic decisions

Answer 30

Centrally planned economy

Question 31

What is socialism?

Answer 31

An Econ system in which the gov owns some or all of the factors of production

Question 32

More extreme form of socialism; no private ownership of property and little or no political freedom

Answer 32

Communism

Question 33

Who wrote communist manifesto? And what did he want?

Answer 33

Karl Marx; he wanted a society in which there was no economic classes

Question 34

Advantages of command economy

Answer 34

Seeks to provide for everyone They can produce things that may not make money in a market economy

Question 35

Disadvantages of command economy

Answer 35

Central leaders have little understanding of local conditions Workers have no motivation to improve their productivity There is no private property therefore no reason for people to use resources responsibly

Question 36

What are private property rights?

Answer 36

The right for individuals and groups to own private property.