Quiz #1 Vocab

Question 0

Value of the choice you have up when you made a decision

Answer 0

Opportunity cost

Question 1

Not enough resources to meet all individual needs and wants

Answer 1

Scarcity

Question 2

Allocation of resources

The three economic questions

Answer 2

What do we produce?
How do we produce it?
For whom do we produce?

Question 3

_________ economy

Private property rights
Voluntary exchange
Households and firms make economic descisions

Answer 3

Market economy

Question 4

___________ economy

Government controls resources and makes economic descisions

Answer 4

Command economy

Question 5

Characteristics of ____________
Mixed economy
Market system with some government involvement

Answer 5

Capitalism

Question 6

Spending on final goods and services for personal use

Answer 6

Consumption

Question 7

Use of money to acquire capital goods and grow the size of firms

Answer 7

Investment

Question 8

Characteristics of _________
Divide one large job into smaller parts
Improves efficiently
Example: assembly line

Answer 8

Specialization

Question 9

Four factors of production

Answer 9

Land
Labor
Capital
Entrepreneurs

Question 10

Earns interest only on original principal

Ex: treasury/corporate bonds

Answer 10

Simple interest

Question 11

Earns interest only on original principal plus interest already earned
Ex: savings account

Answer 11

Compound interest

Question 12

Quantity demanded>quantity supplied: price will RISE

Answer 12

Shortage

Question 13

Quantity supplied>quantity demanded: price will FALL

Answer 13

Surplus

Question 14

Observing the effect of each incremental decision.

Answer 14

Marginal analysis