Unit 1: Economics Final Exam Review

Question 1

Economics

Answer 1

Using limited resources to fulfill unlimited wants

Question 2

Thinking at the margin

Question 3

Incentives

Question 4

Scarcity

Answer 4

The permanent condition of not being able to have all the goods and services you want.

Question 5

Shortage

Answer 5

A situation where a good or service is temporarily unavailible.

Question 6

Factors of production

Answer 6

Land, labor, and capital goods.

Question 7

Trade-offs

Answer 7

Everything you give up when making a decision.

Question 8

Rational choice

Answer 8

The thing you decided to do.

Question 9

Opportunity Cost

Answer 9

Your number 1 tradeoff.

Question 10

Utility

Answer 10

A measure of how much someone enjoys a good or service.

Question 11

Production Possibilities Curve shows…

Answer 11

All the ways to use an economy’s resources.

Question 12

3 Basic Economic Questions

Answer 12

What are we going to produce, how are we going to produce it, who gets it?

Question 13

Command Economy

Answer 13

Controlled by the government. Prices and quantities are set by the central government.

Question 14

Underutilization

Question 15

Surplus

Question 16

Market economy

Question 17

Mixed economy

Question 18

Specialization

Answer 18

It is more efficient to focus your effort than to distribute it (assembly line)

Question 19

Absolute advantage

Answer 19

The ability to produce more of a product than another country, using the same amount of resources.

Question 20

Comparative Advantage

Answer 20

The ability to produce a good at a lower opportunity cost (more efficiently) than another country.