Unit 1 Vocab

Question 1

Economics

Answer 1

The study of how people try and satisfy UNLIMITED WANTS with LIMITED RESOURCES

Question 2

Opportunity cost

Answer 2

The cost of the next best alternative use of money, time, or resources when one choice is made rather than another

Question 3

Entrepreneur

Answer 3

“Risk taker” starts a business; search of profits

Question 4

Resource

Answer 4

Anything that can be used to produce something else(land, labor, capital, entrepreneurship)

Question 5

Microeconomics

Answer 5

The study of how households and firms make decisions and how they interact in markets

Question 6

Macroeconomics

Answer 6

The study of the economy as a whole; focuses on the big picture and ignores fine details

Question 7

Economic aggregate

Answer 7

Economic measures that summarize data across many different markets

Question 8

Positive economics

Answer 8

The branch of economic analysis that describes the way the economy actually works

Question 9

Normative economics

Answer 9

Makes opinions about the way the economy should work

Question 10

Market economy

Answer 10

The decision of individual producers and consumer largely determine what, how, and for whom to produce, with little government involvement in the decisions

Question 11

Business cycle

Answer 11

The short-run alternation between economic upturn, known as expansions, and downturns, known as recessions

Question 12

Trough/peak

Answer 12

The low and the high point in a typical business cycle

Question 13

Depression

Answer 13

A very deep and prolonged downturn

Question 14

Recession

Answer 14

Periods of economic downturns when output and employment are falling

Question 15

Expansion

Answer 15

“Recoveries”; periods of economic upturn when output and employment are rising

Question 16

Price Stability

Answer 16

The aggregate price level is changing only slowly

Question 17

Inflation and deflation

Answer 17

When the overall price is rising or falling

Question 18

Economic growth

Answer 18

Increase in the maximum amount of goods and services an economy can produce

Question 19

Employment

Answer 19

The number of people currently employed in the economy

Question 20

Unemployment

Answer 20

The number of people who are actively looking for work but aren’t currently employed

Question 21

Labor force

Answer 21

Equal to the sum of employment and unemployment

Question 22

Trade-off

Answer 22

Alternate choices when spending money or time

Question 23

PPC

Answer 23

Model illustrates the trade-off 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 good produced

Question 24

Tariff

Answer 24

A tax imposed by one country on the goods and services imported from another country

Question 25

Comparative advantage

Answer 25

Country’s ability to produce a given product relatively more efficiently than another country

Question 26

Absolute advantage

Answer 26

Country ability to produce a given product more efficiently than can another country

Question 27

Trade

Answer 27

When Individuals provide goods and services to others and receive goods and services in return

Question 28

Specialization

Answer 28

A situation in which different people each engage in the different task that he or she is good at performing

Question 29

Capital

Answer 29

Anything long-lasting that is created by humans for use in production; tools, factories

Question 30

Efficiency

Answer 30

Society gets the most from scarce resources

Question 31

Equity

Answer 31

When prosperity is distributed uniformly among society’s members

Question 32

Circular flow model

Answer 32

Product market: consumers demand, producers supply; Resource market: producers demand and consumers supply

Question 33

Incentive

Answer 33

A payment or concession to stimulate greater output or investment