Unit 1

Question 1

Microeconomics

Answer 1

Studies how individuals, households, and firms make decisions and how those decisions interact

Question 2

Economics

Answer 2

Study of scarcity and choice

Question 3

Individual Choice

Answer 3

decisions by individuals about what to do, which necessarily involve decisions about what not to do

Question 4

Economy

Answer 4

system for coordinating a society’s productive and consumptive activities

Question 5

Resource

Answer 5

anything that can be used to produce something else

Question 6

Land

Answer 6

natural resources used to produce goods and services

Question 7

Labor

Answer 7

the workers and their effort

Question 8

Capital

Answer 8

manufactured goods to make other goods and services reusable products

Question 9

Entrepreneurship

Answer 9

process of starting, organizing, managing and assuming the responsibility for a business

Question 10

Scarcity

Answer 10

limited resources for unlimited wants and needs

Question 11

Opportunity Cost

Answer 11

what you give up, amount of other products sacrificed to produce one product

Question 12

Explicit Cost

Answer 12

Monetary expenses, costs that involve spending money

Question 13

Implicit Cost

Answer 13

the cost of benefits that are given up, non-monetary opportunity costs

Question 14

Economic aggregates

Answer 14

Economic measures that summarizes data across many different markets

Question 15

economic model

Answer 15

simplified framework that is designed to illustrate complex processes

Question 16

Ceteris Paribus

Answer 16

see other things as equal, all other things are help constant

Question 17

Trade-off

Answer 17

sacrificing one thing for another, all the possible choices you didn’t make
- options where a choice can be made

Question 18

tenants of capitalism

Answer 18

economic system in which private individuals or businesses own capital goods

Question 19

Production Possibilities Curve (PPC)

Answer 19

shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced

Question 20

Efficiency

Answer 20

the productivity derived from the use of some resource

Question 21

Inefficiency

Answer 21

production anywhere inside the curve (not using resources to maximum potential)

Question 22

Economic good

Answer 22

a good or service that has a benefit to society

Question 23

Economic growth

Answer 23

an increase in the capacity of an economy to produce goods and services compared from one period of time to another

Question 24

Allocate

Answer 24

How resources are allotted to the people who want them

Question 25

Rightward shift

Answer 25

when economy grows and output increases, we produce more, causing shift to the right

Question 26

Leftward shift

Answer 26

a decrease in the production capacity of an economy

Question 27

Technology

Answer 27

the technical means for the production of goods/services

Question 28

Trade

Answer 28

in market economy, the individuals provide goods and services to others and receive goods and services in return

Question 29

Specialization

Answer 29

different people each engage in the different task they are good at

Question 30

Comparative advantage

Answer 30

lower relative or comparative cost that that of another - who is more efficient based on opportunity cost

Question 31

Absolute Advantage

Answer 31

2 parties involved, solve it by who produces more and more efficiently

Question 32

Terms of Trade

Answer 32

indicate the rate at which one good can be exchanged for another

Question 33

Independent Variable

Answer 33

variable that you can control and is not affected by any other variable

Question 34

Dependent Variable

Answer 34

variable that depends on other factors

Question 35

Curve on graph

Answer 35

increasing opportunity costs, curve shows efficient or inefficient

Question 36

a country...

Answer 36

a country should specialize in and export the good for which it has a comparative advantage

Question 37

Marginal

Answer 37

additional

Question 38

Utility

Answer 38

satisfaction (utils, unit)

Question 39

Marginal Benefit

Answer 39

additional benefit

Question 40

Marginal cost

Answer 40

additional cost

Question 41

Optimal choice

Answer 41

total net benefit, MB=MC

Question 42

Diminishing Marginal utility

Answer 42

as I consume something more and more, I get less satisfaction each time I consume it

Question 43

Utility Maximization

Answer 43

combination of 2 goods consumptions that weighs my costs and fives me the best choice - individuals and companies seek to achieve the highest level of satisfaction from their economic decisions.

Question 44

formula for marginal analysis

Answer 44

Mux/Px = MuY/Py MU - Marginal Utility x and y - cost of each

Question 45

how to find consumer surplus

Answer 45

total benefit - total cost

Question 46

What is a market economy?

Answer 46

Individuals

Question 47

How does a market economy work?

Answer 47

Individual competition

Question 48

For who is a market economy?

Answer 48

supply/demand

Question 49

What is a command economy?

Answer 49

Government

Question 50

How does a command economy work?

Answer 50

by the government

Question 51

for who is the command economy

Answer 51

government

Question 52

What is a mixed economy?

Answer 52

Individual own, government own, and the government regulates

Question 53

How does a mixed economy work?

Answer 53

Businesses decide, government regulates ex. FDA, EPA