UNIT 1

Question 1

What is economics the study of?

Answer 1

Economics is the study of scarcity and choice.

Question 2

What is individual choice

Answer 2

Every economic issue involves, at its
most basic level, individual choice—decisions by individuals about what to do and what not to do.

Question 3

Economy

Answer 3

An economy is a system for coordinating a
society’s productive and consumptive
activities.

Question 4

Market Economy

Answer 4

In a market economy, the decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions

Question 5

Property rights

Answer 5

Property rights establish ownership
and grant individuals the right to trade
goods and services with each other.

Question 6

marginal analysis

Answer 6

Marginal analysis is the study of the
costs and benefits of doing a little bit
more of an activity versus a little bit less.

Question 7

resource

Answer 7

A resource is anything that can be used
to produce something else.

Question 8

land

Answer 8

Land refers to all resources that come
from nature, such as minerals, timber and
petroleum.

Question 9

labor

Answer 9

Labor is the effort of workers.

Question 10

capital

Answer 10

Capital refers to manufactured goods
used to make other goods and services.

Question 11

entrepreneurship

Answer 11

Entrepreneurship describes the efforts
of entrepreneurs in organizing resources
for production, taking risks to create new
enterprises, and innovating to develop
new products and production processes.

Question 12

scarce resource

Answer 12

A scarce resource is not available in
sufficient quantities to satisfy all the various
ways a society wants to use it.

Question 13

microeconomics

Answer 13

Microeconomics is the study of how
people make decisions and how those
decisions interact.

Question 14

macroeconomics

Answer 14

Macroeconomics is concerned with the
overall ups and downs in the economy.

Question 15

economic aggregate

Answer 15

Economic aggregates are economic
measures that summarize data across
many different markets.

Question 16

positive economics

Answer 16

Positive economics is the branch of
economic analysis that describes the way
the economy actually works.

Question 17

normative economics

Answer 17

Normative economics makes prescriptions
about the way the economy should work.

Question 18

tradeoff

Answer 18

You make a trade-off when you give up
something in order to have something else.

Question 19

PPC

Answer 19

The production possibilities curve
illustrates the trade-offs facing an economy
that produces only two goods. It shows the
maximum quantity of one good that can be
produced for each possible quantity of the
other goods produced.

Question 20

efficiency

Answer 20

An economy is efficient if there is no way to
make anyone better off without making at least one person worse off.

Question 21

Technology

Answer 21

Technology is the technical means for
producing goods and services.