quiz 1ab

Question 1

economics

Answer 1

the study of the choices humans make in a world of scarcity

Question 2

scarcity

Answer 2

wants are unlimited, but resources are limited

Question 3

what does economics focus on? (3 things)

Answer 3

individuals, institutions, society

Question 4

what are the 2 consumer resources?

Answer 4

money (to buy things) & time (to earn money)

Question 5

what are the 4 producer resources?

Answer 5

land - physical land, animals and resources
labor - human workers and resources
capital - man made resources and the knowledge of workers; education levels
entrepreneurship - willing to take risks with LLC to make a profit

Question 6

trade off

Answer 6

A SITUATION - an exchange of 1 thing in return for another

Question 7

opportunity cost

Answer 7

MENTAL RANKINGS - the value of the next highest alternative

Question 8

explicit opportunity cost

Answer 8

what you payed for

Question 9

implicit opportunity cost

Answer 9

what you could have bought (basically opportunity cost)

Question 10

____ -> _____ -> _____

Answer 10

scarcity -> choice -> opportunity cost

Question 11

marginal analysis

Answer 11

benefits and costs

Question 12

marginal changes

Answer 12

small adjustments to a plan of action

Question 13

when do you take action buying consumer items?

Answer 13

when marginal benefit = marginal cost

Question 14

utility

Answer 14

the satisfaction from consuming a good or service

Question 15

what unit is utility measured in?

Answer 15

utils

Question 16

celenis paribus

Answer 16

other things equal

Question 17

What does PPC stand for?

Answer 17

Production Possibilities Curve

Question 18

What does PPC have to do with econmics?

Answer 18

the possible combinations of goods and services that can be produced by a single nation, firm, or individual

Question 19

what 4 things can we assume from ppc?

Answer 19

1. full employment
2. fixed resources
3. fixed technology
4. 2 goods (consumer & capital)

Question 20

what happens in an increasing ppc opportunity cost graph?

Answer 20

the economic resources we use aren’t the same for both products, so therefore the cost to make product A may require the lost of 2 of product B. If product A is increased again, 4 of product B will be lost

Question 21

what happens in a constant ppc opportunity cost graph?

Answer 21

the economic resources are the same / similar for both products. Therefore, every time product A is increased, product B will consistently decrease.

Question 22

what happens if a nation focuses more on capital goods rather than consumer goods?

Answer 22

economic growth

Question 23

what can contribute to economic growth & a shift to the right on the graph? (4 things)

Answer 23

1. more resources
2. advances in technology
3. trades within countries
4. focus on capital goods

Question 24

what does it mean if there are points inside the curve? (not on the line, but rather inside)

Answer 24

unemployment

Question 25

what does it mean if there are points outside the curve?

Answer 25

unattainable

Question 26

what happens when the economy grows? (3 things)

Answer 26

1. the production possibilities curve shifts outward
2. present choices & future possibilities
3. how resources now can improve economic growth in the future

Question 27

what effects does implications on international trade have?

Answer 27

specialization and trade have the same effect as more/ better resources

Question 28

what does it mean for a nation to be economically efficent?

Answer 28

they use the limited resources to get the max amount of utility

Question 29

what are some examples of economic efficiency? (2 things)

Answer 29

1. full employment

2. full production

Question 30

what is optimal allocation?

Answer 30

how a society decides its optimal point on the PPC

Question 31

how should economic activity be expanded?

Answer 31

to the point where MB=MC