Leeson 1

Question 1

Durable good

Answer 1

an item that lasts three years or more when used on a regular basis. (Car,, tools, washing machine, etc)o

Question 2

Non durable good

Answer 2

an item that lasts fewer than 3 years when used regularly. (Food, paper, and most clothing

Question 3

Consumer good

Answer 3

goods bought and used by individual consumers (shoes, shirts. Automobile, etc)

Question 4

Capital good

Answer 4

a tool or good used to produce other goods. (Machines, wood, steel, plastic, etc)

Question 5

Services

Answer 5

work or labor performed by someone (haircut, car repair, entertainment, etc)

Question 6

Goods are __________(something that can be touched), _________ are not (intangible)

Answer 6

Tangible

Intangible

Question 7

Value

What determines value

Answer 7

the monetary worth of a good or service

• the cost that someone is willing to pay for something

Question 8

Paradox of value

Answer 8

contradiction between the high values of a nonessential items (diamonds) and a low value of an essential item (water)

Question 9

Adam smith

The wealth of Nations, argued that for something to have value it must be

Answer 9

father of capitalism) in his book, The wealth of Nations, argued that for something to have value it must be scarce and have utility (worth)

Question 10

This is the solution of the paradox of value:

Answer 10

• diamonds are scarce and have utility (worth)

* Water has utility but is not scarce (in most places - not valuable

Question 11

two factors that determine value.

Answer 11

Scarcity and Utility

Question 12

Wealth

Answer 12

the accumulation of products that are tangible, scarce, and have utility

Question 13

• a nations wealth comprises all ______ items (natural resources) factories, stores, houses, hotels, etc

Answer 13

Tangible

Question 14

• Goods are counted as _______ but services are ____

Answer 14

• Goods are counted as wealth but services are not

Question 15

• because resources are ______, everything has a ____ - even when it seems we’re getting something for _____

Answer 15

• because resources are limited, everything has a cost - even when it seems we’re getting something for free

Question 16

TINSTAAFL

Answer 16

there is no such thing as a free lunch

*most things in life are not free, someone has to pay for them

Question 17

What are the economic basic choices faced by all societies?

Answer 17

1. What to produce- decision made by the gov or the people
2. How to produce it - more automated machines, robots or more workers? Must weigh the costs
3. For whom to produce it for?

Question 18

Goods

Answer 18

useful tangible item (physical item) that is used to satisfy a need or a want. (Book, car, iPad, etc

Question 19

Two types of economic products

Answer 19

Services and goods

Question 20

Need

Answer 20

basic requirement for survival. (Food, clothing, shelter)

Question 21

Want

Answer 21

something we would like to have, but is not necessary for survival (computer, cell phone, etc)

Question 22

Microeconomics

Answer 22

is they study of individuals, households, and companies behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.

Question 23

Macroeconomic

Answer 23

is the branch of economics that studies the behavior and performance of an economy as a whole. (City, nation, global) It focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product, and inflation. Things that apple to the whole nation

Question 24

__________ looks at how the economy works as a whole

Answer 24

Macroeconomic

Question 25

Scarcity

Answer 25

the condition that results from society not having enough resources to produce all the things that people would like to have (wants, needs)

1. What to produce?
2. How to produce?
3. For whom to produce?

Question 26

Economics

Answer 26

the branch of knowledge concerned with the production, consumption, distribution of good and services, and the transfer of wealth.
• the study of people and the choices they make