intro to economics: vocab

Question 1

economics

Answer 1

study of how people try to satisfy unlimited wants when there are limited resources

Question 2

good

Answer 2

items of value that can be seen/touched

Question 3

service

Answer 3

actions; intangible

Question 4

resources/factors of production

Answer 4

things used in the production of goods and services

Question 5

need

Answer 5

basic requirements that are necessary for survival

Question 6

labor

Answer 6

human effort in the production of goods and services

Question 7

capital

Answer 7

man made items used in the production of goods and services

Question 8

land

Answer 8

natural resources used in the production of goods and services

Question 9

scarcity

Answer 9

1st law

having limited resources to fulfill unlimited wants and needs

Question 10

opportunity cost

Answer 10

2nd law

what must be given up in order to obtain an item

Question 11

utility

Answer 11

capacity of good or service to be useful

Question 12

law of diminishing return

Answer 12

each succeeding unit of an item satisfies a less intense desire than the previous one

Question 13

maximum satisfaction

Answer 13

ability to get the most use for the least cost

Question 14

resources

Answer 14

things that are limited in the economy

Question 15

consumption

Answer 15

use of goods and services

Question 16

production

Answer 16

creation of goods and services

Question 17

management

Answer 17

those who choose the mix of resources to manufacture a product or service

Question 18

three basic questions that all economies have to answer

Answer 18

1. what to produce
2. how to produce it
3. who gets it

Question 19

margin

Answer 19

one more unit

Question 20

marginal cost

Answer 20

extra coast of adding one more unit of output

Question 21

marginal benefit

Answer 21

extra benefit of adding one more unit of output

Question 22

production possibility curve

Answer 22

all possible output combos between two products

Question 23

line on production possibility curve name

Answer 23

production possibility frontier

Question 24

four economic systems

Answer 24

traditional
free market
centrally planned system
mixed

Question 25

traditional economic system

Answer 25

relies on ancestors

Question 26

free market system

Answer 26

individuals and consumers

Question 27

centrally planned system

Answer 27

government

Question 28

mixed

Answer 28

government and individuals

Question 29

free enterprise

Answer 29

private business operates in competition and free of state control

Question 30

private property

Answer 30

ownership of a property

Question 31

open opportunity

Answer 31

everyone can compete in market

Question 32

legal equality

Answer 32

everyone can compete because we have the same rights

Question 33

free contract

Answer 33

people can decide what agreements they want to get into

Question 34

voluntary exchange

Answer 34

people can buy or sell what they want

Question 35

profit motive

Answer 35

encourages people to improve

Question 36

public good

Answer 36

goods provided by government and consumed by the general public as a whole

Question 37

why would the government step in for a public good

Answer 37

not enough profit

high startup cost

Question 38

free rider

Answer 38

people who receive benefits but don’t pay

Question 39

shared responsibilities

Answer 39

government provides initial funding, then private sector does day to day operation

Question 40

externality

Answer 40

side effect of transaction that affects others

Question 41

public transfer payments

Answer 41

transfers of income from one to another, giver doesn’t receive anything (taxpayer to recipient)