Test 1

Question 1

Things that are produced and then used in the production of other good and services.

Answer 1

capital

Question 2

The inputs into the process of production (another term for resources)

Answer 2

Factors of production (or factors)

Question 3

the process that transforms scarce resources into useful goods and srvices

Answer 3

production

Question 4

anything provided by nature or previous generations that can be used directly or indirectly to satisfy human wants

Answer 4

inputs or resources

Question 5

goods and services of value to households

Answer 5

outputs

Question 6

the best alternative that we give up, or forgo, when we make a choice or decision

Answer 6

opportunity cost

Question 7

a producer has a ____ ______ over another in the production of a good or service if he or she can produce that product using few resources.

Answer 7

absolute advantage

Question 8

a producer has a _____ _______ over another in the production of a good or service if he or she can produce that product at a lower opportunity cost.

Answer 8

comparative advantage

Question 9

goods produced for present consumption

Answer 9

consumer goods

Question 10

the process of using resources to produce new capital

Answer 10

investment

Question 11

a graph that shows all the combinations of goods and services that can be produced if all of society’s resources are used efficiently.

Answer 11

Production possibility frontier (PPF)

Question 12

The slope of the production possibility frontier (ppf)

Answer 12

Marginal rate of transformation (MRT)

Question 13

An increase in the total output of an economy. growth occurs when a society acquires new resources or when it learns to produce more using existing resources.

Answer 13

ecnoomic growth

Question 14

an economy in which a central gov. either directly or indirectly sets output targets, incomes, and prices.

Answer 14

command economy

Question 15

“allow (them) to do.” An economy in which individual people and firms pursue their own self-interest without any central direction or regulation.

Answer 15

Laissez-faire economy

Question 16

The institution through which buyers and sellers interact and engage in exchange.

Answer 16

market

Question 17

the idea that consumers ultimately dictate what will be produced (or not produced) by choosing what to purchase (and what not to purchase)

Answer 17

consumer sovereignty

Question 18

the freedom of individuals to start and operate private businesses in search of profits

Answer 18

free enterprise

Question 19

the study of scarcity & how we deal with the scarcity

Answer 19

economics

Question 20

an organization that transforms resources (inputs) into products (outputs). ___ are the primary producing units in a market economy.

Answer 20

firm

Question 21

A person who organizes, manages, and assumes the risks of a firm, taking a new idea or a new product and turning it into a successful business.

Answer 21

entrepreneur

Question 22

the consuming units in an economy

Answer 22

households

Question 23

the markets in which goods and services are exchanged

Answer 23

product or output market

Question 24

the markets in which the resources used to produce goods and services are exchanged

Answer 24

input or factor markets

Question 25

the amount (# of units) of a product that a household would buy in a given period if it could buy all it wanted at the current market price.

Answer 25

quantity demanded

Question 26

shows how much of a given product a household would be willing to buy at different prices for a given time period

Answer 26

demand schedule

Question 27

a graph illustrating how much of a given product a household would be wiling to buy at different prices.

Answer 27

demand curve

Question 28

the negative relationship between price and quantity demanded. Ceteris paribus, as price rises, quantity demanded decreases; as price falls, quantity demanded incresases

Answer 28

law of demand

Question 29

the sum of all a household's wages, salaries, profits, interest payments, rents, and other forms of earnings in a given period of time. it is a flow measure.

Answer 29

income

Question 30

the total value of what a household owns minus what is owes. it is a stock measure.

Answer 30

wealth or new worth

Question 31

goods for which demand goes up when income is higher and for which demand goes down when income is lower.

Answer 31

normal goods

Question 32

goods that can serve as replacements for one another; when the price of one increases, demand for the other increases.

Answer 32

substitutes

Question 33

identical products (american vs. japanese cars)

Answer 33

perfect substitutes

Question 34

goods that "go together," a decrease in the rice of one results in an increase in demand for the other and vice versa (eggs & bacon)

Answer 34

complement(s)/ary goods

Question 35

the change that takes place in a demand curve corresponding to a new relationship between quantity demanded of a good and price of that good. the shift is brought about by a change in the original conditions.

Answer 35

shift of a demand curve

Question 36

the change in quantity demanded brought about by a change in price

Answer 36

movement along a demand curve

Question 37

the sum of all the quantities of a good or service demanded per period by all the households buying in the market for that good/service

Answer 37

market demand

Question 38

the difference between revenues and costs

Answer 38

profit

Question 39

the amount of a particular product that a firm would be willing and able to offer for sale at a particular price during a given time period.

Answer 39

quantity supplied

Question 40

shows how much of a product firms will sell at alternative prices

Answer 40

supply schedule

Question 41

the positive relationship between price and quantity of a good supplied. an increase in market price will lead to an increase in quantity supplied, and a decrease in market price will lead to a decrease in quantity supplied

Answer 41

law of supply

Question 42

a graph illustrating how much of a product a firm will sell at different prices

Answer 42

supply curve

Question 43

the change in quantity supplied brought about by a change in price

Answer 43

movement along a supply curve

Question 44

the change that takes place in a supply curve corresponding to a new relationship between quantity supplied of a good and the price of a good. the shift is brought about by a change in the original conditions

Answer 44

shift of a supply curve

Question 45

the sum of all that is supplied each period by all producers of a single product

Answer 45

market supply

Question 46

the condition that exists when quantity supplied and quantity demanded are equal. at ____, there is no tendency for price to change.

Answer 46

equilibrium

Question 47

the condition that exists when Q.D. exceeds Q.S. at the current price

Answer 47

excess demand or shortage

Question 48

the condition that exists when Q.S. exceeds Q.D. at the current price.

Answer 48

excess supply or surplus