Unit 1

Question 1

Why are scarcity and choice the basic to the study of economics?

Answer 1

There is not an endless supply of resources

Question 2

What does the acronym TINSTAAFL mean?

Answer 2

Every economic decision has a cost, nothing is free

Question 3

Something such as air, food, or shelter that is necessary for survival is best described as?

Answer 3

Needs

Question 4

In Economic terms, what do we call physical objects such as clothes, bicycles, houses, cars, toilet paper or shoes?

Answer 4

Goods

Question 5

In microeconomic terms, what do we call natural resources that are used to make goods and/or services?

Answer 5

Land

Question 6

Which term is used to describe human-made resource that are used to create other goods and/or services?

Answer 6

Capital

Question 7

The Opportunity cost of an economic decision is

Answer 7

the next best opportunity that you give up when one choice is made over another.

Question 8

Definition of ECONOMICS?

Answer 8

The science of decision-making

Question 9

Entrepreneurs are people that

Answer 9

Pull together a capital to make a business

Question 10

The purpose of the production possibilities curve shows

Answer 10

an alternate way of being fully eff using all available resources.

Question 11

The resources used to make goods and services are called

Answer 11

Factors of production.

Question 12

Economic models are used for what main purpose?

Answer 12

To explain, simplify, or make predictions about economic outcomes.

Question 13

Labor, in economic terms, tell me the 3 things that go into the workers Labor

Answer 13

Efforts, ability, and skill

Question 14

List the 4 factors of production and give examples of each

Answer 14

Land - farmland & minerals, Labor - Employees & Engineers, Capital - money & machinery, and Entrepreneurship - risk taker

Question 15

All points represented on the curve of the production possibilities frontier represent:

Answer 15

Maximum Output

Question 16

Increased productivity causes the production possibilities frontier to

Answer 16

Shift right

Question 17

The money we spend on a good or service is only part of the actual cost; what do we call the overall cost of an economic decision?

Answer 17

Opportunity cost

Question 18

One example of an economic model that graphically represents the concept of opportunity cost is:

Answer 18

Production possibilities curve

Question 19

J M Keynes wrote an important book about the government’s place in the economic world. When was the book published? year and event

Answer 19

“The General Theory of Employment, Interest, and Money.” Published in 1936 during the great depression.

Question 20

Definition of an “entrepreneur?”

Answer 20

A person willing to take risk and not scared of failing.

Question 21

The four factors of production are used to help us understand economic activity. What is another word that economists use to describe the 4 factors of production?

Answer 21

Input

Question 22

In Economic terms, define and give 2 examples of specialization?

Answer 22

When a person, business, or geographic region can perform a task better than others. Ecuador specializes in growing bananas. A server in a restaurant.

Question 23

Cost benefit analysis is the practice of

Answer 23

comparing the cost of an action to the possible benefits of the decision.

Question 24

What are the three ideas of Thinking like an economist involves

Answer 24

Cost benefit analysis, building simple models, and making decisions in small steps.

Question 25

What are the three basic questions of economics that each individual, business and society must answer to be successful in an economic world? Explain each

Answer 25

A) What to Produce? Each person, business, and society must decide.

B) How to produce it? What combination of technology and human resources.

C) For whom should it be produced? Society must decide

Question 26

Adam Smith wrote a famous book about economics. See if you can remember some important facts about the book and its subject matter:

What was the name of the book? what year was it published?

What are TWO of the key ideas Smith included in his famous publication?

Answer 26

The Wealth of Nations, 1776

A) Division of Labor

B) Specialization

Question 27

Which of the Four Factors of Production is “different” from the others and WHY?

Answer 27

Entrepreneurship- because the quantities are not varied to affect manufacturing

Question 28

Give 5 Examples of an opportunity cost

Answer 28

We didn’t go to the beach this summer, instead we saved money to buy a computer for college. We didn’t go to the cheesecake factory, instead we got fast food to save money. We didn’t go to ulta, instead we bought makeup from tj max for a cheaper price.