Lesson 3 pg. 9 - 12

Question 1

Is there an unlimited supply of goods? Explain

Answer 1

No, there is not an unlimited supply of goods because of limited quantity and cost. Limited to human ability or cultivation and the fact that everything has to be paid for and there are never enough goods produced to satisfy everybody’s wants.

Question 2

Define prodigality

Answer 2

prodigality - bad habit of spending more than one can afford

Question 3

Define a need

Answer 3

Need - a necessity; something it would be difficult to do without

Question 4

Define a want

Answer 4

Want - a desire, longing, or appetite for something

Question 5

For those goods we need most, we are willing to pay more than we would pay for what?

Answer 5

For those goods we need most, we are willing to pay more than we would pay for goods of less importance to us.

Question 6

How do economists classify goods?

Answer 6

Economists classify goods under one or the other of two headings–capital goods and consumer goods.

Question 7

Define and describe capital goods

Answer 7

> capital good (sometimes called an investment good or simply capital) is anything used in the production and distribution of goods and services
created because they are necessary for making and distributing of other goods, whether capital or consumer products

Question 8

Describe consumer goods

Answer 8

consumer goods -those things produces for direct use by consumers: they are made to satisfy people’s wants

Question 9

How does a nation contrive to produce more capital goods?

Answer 9

A nation contrives to produce more capital goods through intelligent work and saving.

Question 10

Define and describe modern technology

Answer 10

> modern technology - industrial skills and scientific methods that make possible efficient production–results from applying intelligence to work