UNIT 1

Question 1

Scarcity

Answer 1

Unlimited wants but limited resources

Question 2

Opportunity Cost

Answer 2

The cost of the next best alternative use of money, time, or resources when you give up something you want in terms of other goods/services

Question 3

Cost Benefit Analysis

Answer 3

Compares a cost of an action to the benefits received

Question 4

Trade Off

Answer 4

Alternative choices to make an economic decision

Question 5

Factors of Production

Answer 5

Land, Capital, Labor, and Entrepreneurs

Question 6

Land

Answer 6

Gifts of nature and Natural resources

Question 7

Labor

Answer 7

People with efforts and abilities

Question 8

Capital

Answer 8

Tools, Equipment, and Factories

Question 9

Entrepreneurship

Answer 9

Individuals who start new businesses

Question 10

Human Capital

Answer 10

The sum of skills, abilities, health, and motivation of people

Question 11

Production possibilities frontier (curve)

Answer 11

A diagram representing various combinations of all goods and/or services and economy can produce when all productive resources are fully employed

Question 12

Consumer Goods

Answer 12

A good intended for final use by individuals (Clothing, Vehicles, Appliances)

Question 13

Capital Goods

Answer 13

A manufactured good that is used towards other goods and services (Coffee Machines, Delivery Cars, Science Equipment)

Question 14

Value

Answer 14

A worth that can be expressed in dollars or cents

Question 15

Utility

Answer 15

The capacity to be useful and provide satisfaction

Question 16

Factor Market

Answer 16

Market where productive resources are bought and sold

Question 17

Product Market

Answer 17

Market where producers sell their goods and services to consumers

Question 18

Standard of Living

Answer 18

The quality of life based on the possession of necessities and luxuries that make life easier

Question 19

Market Economy

Answer 19

Independent interests and people’s decisions act as votes

Question 20

Command Economy

Answer 20

Central authority by government, little influence by the people

Question 21

Traditional Economy

Answer 21

Ritual, habit, or customs. Specific roles

Question 22

Economic Efficiency

Answer 22

Resources are scarce, production must be used wisely. Must be efficient so benefits are greater than cost

Question 23

Economic Growth

Answer 23

Growth is needed to provide more goods and services, required to meet more needs

Question 24

Economic equity

Answer 24

Illegal to discriminate in employment, no false product claims

Question 25

Full Employment

Answer 25

Provision for an many jobs as possible

Question 26

Price Stability

Answer 26

Stable prices and pay combat against inflation. Fixed income is harder to live on. Price stability helps budgeting and certainties for the future

Question 27

Economic Security

Answer 27

State funds for people without jobs, and insurance plans, social security, and Medicare for workers

Question 28

Economic Freedom

Answer 28

Individual choice of occupations, money usage, and employers, business can choose where and how to produce

Question 29

Comparative Advantage

Answer 29

The ability of an economy to produce a good/service more efficiently and economically competitive than others at a lower opportunity cost

Question 30

Absolute Advantage

Answer 30

The ability to produce a service/good at a greater quantity with the same quantity of inputs per unit of time than its competitors

Question 31

Terms of Trade

Answer 31

The ratio between a county’s export prices and import prices

Question 32

Economic Interdependence

Answer 32

Mutual dependence of participants in an economic system who trade to obtain products they can’t produce

Question 33

Globalization

Answer 33

The flow and spread of financial products, goods, technology, information, and jobs between other countries

Question 34

Lemon laws

Answer 34

Provide a solution/protection for purchasers of cars and other goods