Opportunity cost

Question 1

Opportunity cost

Answer 1

the cost of choosing; what you give up by choosing one option

Question 2

Goods

Answer 2

objects that can fulfill human wants/needs, provide utility

Question 3

Services

Answer 3

economic activity that is intangible; provides utility, but cannot be stored

Question 4

Endowment

Answer 4

natural and human resources from which all goods and services must be produced

-finite, but not fixed (scarcity)

Question 5

Utility

Answer 5

satisfaction; economists assume maximizing this drives individual choice; measured in utils

Question 6

Profit motive

Answer 6

the tendency of people to engage in activities that will lead to monetary gain

Question 7

Consumer sovereignty

Answer 7

the economic power of the individual in a free market

Question 8

Government regulation

Answer 8

requirements the government places on private firms and individuals to achieve the government’s goals

Question 9

Marginal utility

Answer 9

additional increment of utility associated with consuming one more unit of a good or service

Question 10

Margin

Answer 10

in a succession of units, the specific unit you are focusing on

Question 11

Total utility

Answer 11

the total satisfaction derived from consuming a specific quantity of a good or service; the total of marginal utilities for all individual units consumed

Question 12

Satiate

Answer 12

satisfy

Question 13

Initial decision

Answer 13

over-simplified decision-making process based on utility (consume until marginal utility =0)

Question 14

Bliss point

Answer 14

maximization of utility

Question 15

Marginal analysis

Answer 15

evaluating the impact of one additional unit

Question 16

Util

Answer 16

a measure of utility (this is an abstract concept)

Question 17

Diminishing marginal productivity

Answer 17

initially, one input increases the initial successive units of input toward the output, but eventually this will add to less output

Question 18

Balancing at the margin

Answer 18

maximizing utility in light of scarcity

Question 19

Discounting the future

Answer 19

utility diminishes the further in the future that utility is realized

Question 20

Microeconomics

Answer 20

focuses on individual decision-making units and how they interact

Question 21

Macroeconomics

Answer 21

explores the economy as a whole

Question 22

Scarcity

Answer 22

the fixed amount of goods or services available

Question 23

Traditional economy

Answer 23

an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rule and manner of their distribution also referred to as a subsistence economy, a traditional economy is defined by bartering and trading

Question 24

Command economy

Answer 24

an economic system in which the means of production are publicly owned and economic activity is directed by a central government or portion of the government

Question 25

Market economy

Answer 25

an economic system in which the forces of supply and demand determine what goods and services are produced

Question 26

Mixed economy

Answer 26

an economy which practiced characteristics of both command and market economies; supply and demand largely influence the economy, but there is government intervention to meet certain economic goals