The Economic Way of Thinking : 1/8/16

Question 1

Consumers have two basic desires. : 1. _____. 2. _____.

Answer 1

Wants, needs

Question 2

_____ are desires that can be satisfied by consuming a good or service.

Answer 2

Wants

Question 3

______ are things such as food, clothing, and shelter, that are necessary for survival.

Answer 3

Needs

Question 4

_________ is the situation that exists when there are not enough resources to meet human wants.

Answer 4

Scarcity

Question 5

___________ is the study of how people choose to use scarce resources to satisfy their wants. It involves : 1. Examining how individuals, business, governments, and societies chose to use s______ r_________ to satisfy their wants. 2. Organizing, analyzing, and interpreting d___ about those economic behaviors. 3. Developing t_______ and economic l____ that explain how the economy works and to predict what might happen in the future.

Answer 5

Economics, scarce resources, data, theories, laws

Question 6

C_____ is central to the use of s______ r_________.

Answer 6

Choice, scarce resources

Question 7

________, then, affects which goods are made and which services are provided.

Answer 7

Scarcity

Question 8

______ are physical objects that can be purchased, such as food, clothing, and furniture.

Answer 8

Goods

Question 9

_________ are work that one person performs for another for payment.

Answer 9

Services

Question 10

________ is a person who buys goods or services for personal use.

Answer 10

Consumer

Question 11

________ is a person who makes goods or produces services.

Answer 11

Producer

Question 12

S______ requires every society to address three basic economic questions. : 1. W____ w___ b_ p_______? 2. H___ w___ i_ b_ p________? 3. F__ w____ w___ i_ b_ p________?

Answer 12

Scarcity, What will be produced?, How will it be produced?, For whom will it be produced?

Question 13

This f____ f______________ e______ q______ involves not only ____ to produce but also ____ _____ to produce.

Answer 13

First fundamental economic questions, what, how much

Question 14

Once decided, s_______ must then decide exactly how they are going to get these goods and services to people.

Answer 14

Societies

Question 15

F_______ of p_________ are the resources needed to produce goods and services.

Answer 15

Factors of production

Question 16

They divide the factors of production into four broad categories. : 1. L____. 2. L_____. 3. C______. 4. E_________________.

Answer 16

Land, labor, capital, entrepreneurship

Question 17

All of these factors have one thing in common– their supply is _______.

Answer 17

Limited

Question 18

L___ includes all the natural resources found on or under the ground that are used to produce goods and services.

Answer 18

Land

Question 19

L_____ is all the human time, effort, and talent that go into the making of products.

Answer 19

Labor

Question 20

C_______ is all the resources made and used by people to produce and distribute goods and services.

Answer 20

Capital

Question 21

C_____ is all of the producer’s physical resources.

Answer 21

Capital

Question 22

For this reason capital is sometimes called p______ c_____, or r___ c_____.

Answer 22

Physical capital, real capital

Question 23

While businesses invest in r___ c______, workers in invest in h_____ c_____.

Answer 23

Real capital, human capital

Question 24

H______ c_______ is the knowledge and skills gained through experience.

Answer 24

Human capital

Question 25

E______________, brings the other three factors together.

Answer 25

Entrepreneurship

Question 26

E______________ is the combination of vision, skill, ingenuity, and willingness to take risks that is needed to create and run new businesses.

Answer 26

Entrepreneurship

Question 27

E___________ are also risk takers. They risk their time, energy, creativity, and money in the hope of making a profit.

Answer 27

Entrepreneurs

Question 28

Factors that shape economic choice. : 1. I_______. 2. U____.

Answer 28

Incentives, utility

Question 29

I________ are methods used to encourage people to take certain actions.

Answer 29

Incentives

Question 30

U_____ is the benefit or satisfaction received from using a good or service.

Answer 30

Utility

Question 31

When people e_________, they consider both incentives and utility.

Answer 31

Economize

Question 32

To e_________ means to make decisions according to the beat combination of costs and benefits.

Answer 32

Economize

Question 33

Every choice involves _____.

Answer 33

Costs

Question 34

_____ can take the form of money, time, or something you value.

Answer 34

Costs

Question 35

T_____-___ do not require all or nothing choices, rather they involve giving up some of one thing to gain more of another.

Answer 35

Trade- offs

Question 36

O__________ c_____ of a decision is the value of the next best alternative, or what you give up by choosing one alternative over another.

Answer 36

Opportunity costs

Question 37

The practice of examining the costs and the expected benefits of a choice as an aid to decision making is called c___-______ _______.

Answer 37

Cost- benefit analysis

Question 38

C____- ______ _______ is one of the most useful tools for individuals when they need to evaluate the relative worth of economic choices.

Answer 38

Cost- benefit analysis

Question 39

The simplest application of cost- benefit analysis is the d________-________ ____.

Answer 39

Decision-making grid

Question 40

The d_________-_______ ___ shows what you get and what you give up when you make choices.

Answer 40

Decision-making grid

Question 41

C____ and b_______ change over time as do g____ and c_____________.

Answer 41

Costs, benefits, goals, circumstances

Question 42

The analysis of m________ c_____ and m_______ b_______ is central to the study of economics.

Answer 42

Marginal costs, marginal benefits

Question 43

M_______ _____ is the additional cost of using one more unit of product.

Answer 43

Marginal cost

Question 44

M_______ _______ is the additional satisfaction from using one more unit of a product.

Answer 44

Marginal benefit

Question 45

The P_________ P_________ F_______ (?) is a graph used by economists to show the impact of scarcity on an economy.

Answer 45

Production Possibilities Frontier (PPF)

Question 46

The PPF is based on assumptions that simplify economic interactions. : 1. Resources are f____. 2. All resources are f_____ e______. 3. Only ___ things can be produced. 4. T__________ is f_____.

Answer 46

Fixed, fully employed, two, technology, fixed

Question 47

C______ p______ is a Latin phrase used in economics to meaning all other things being held equal or constant.

Answer 47

Ceteris paribus

Question 48

The ___ represents the b_____-- or f_____-- between what it is possible to produce and what is not possible to produce.

Answer 48

PPF, border, frontier

Question 49

The ___ shows the opportunity costs of each choice in a v_____ way.

Answer 49

PPF, visual

Question 50

Anything ______ the curve is an _________ use of resources. A point __ the curve is an ______ use of resources. Anything ______ the curve is ___________.

Answer 50

Inside, inefficient, on, efficient, outside, impossible

Question 51

E_________ is the condition in which economic resources are being used to produce the maximum amount of goods and services.

Answer 51

Efficiency

Question 52

U______________ is the condition in which economic resources are not being used to their full potential.

Answer 52

Underutilization

Question 53

The _____ of the ____ shows a third important economic concept.

Answer 53

Shape, PPF

Question 54

The l___ of i_________ o__________ c____ states that as production switches from one product to another, increasing amounts of resources are needed to increase the production of the second product.

Answer 54

Law of increasing opportunity costs

Question 55

The ___ illustrates a country’s p______ p_______ p__________ as if all resources were f____.

Answer 55

PPF, present production possibilities, fixed

Question 56

Anything that causes economic output to increase or decrease will _____ the curve.

Answer 56

Shift

Question 57

Things that would make the PPF shift ______. : 1. E________ g_____. 2. T_________.

Answer 57

Outward, economic growth, technology

Question 58

Things that would make the PPF shift ______. : 1. N______ d______. 2. W__/ p_____.

Answer 58

Inward, natural disaster, war, plague