VOCAB

Question 1

Individual Choice

Answer 1

The decision by someone of what not to do or do.

Question 2

Resources

Answer 2

Anything that can be used to produce something else

Question 3

Opportunity cost

Answer 3

Real cost of an item is its opportunity cost.
What you must give up in order to get it

Question 4

Trade off

Answer 4

Compare the costs with the benefits of doing something else

Question 5

Marginal decisions

Answer 5

Decisions about whether to do a bit more or less of an activity

Question 6

Marginal analysis

Answer 6

The study of decisions

Question 7

Incentives

Answer 7

An opportunity to make themselves better off

Question 8

Trade

Answer 8

Provide a good or service to others and receive goods and services in return

Question 9

Gains from trade

Answer 9

Getting more of what they want
Allows us to consume more than we normally would

Question 10

Specialization

Answer 10

An increase in output due to specialization
Person specializing in a task they’re good at performing

Question 11

Equilibrium

Answer 11

An economics situation in which no individual would be better off doing something different

Question 12

Equity

Answer 12

A condition in which everyone gets a fair share of

Question 13

Efficiency

Answer 13

An economy is efficient if there are no missed opportunities

Question 14

Market failure

Answer 14

When the state of balance tips off
(Rising in prices)

Question 15

Overall spending

Answer 15

Amount of goods and services that consumers and business what to buy

Question 16

Economic growth

Answer 16

The increase in living standards over time

Question 17

Economy’s potential

Answer 17

The total amount of goods and services it can produce

Question 18

Recession

Answer 18

Economic growth (GPP) goes down
Spending slows down and unemployment rises

Question 19

Potential

Answer 19

Labor, physical capital, technology and education

Question 20

Model

Answer 20

A simplified representation of a real life situation that is used to better understand real life situations

Question 21

Other things equal assumption

Answer 21

In the development of a model, the assumption that all other relevant factors remain unchanged

Question 22

Thought experiments

Answer 22

The most effective form of economic modeling
Simplified, hypothetical versions of real life situations

Question 23

Production possibilities frontier (PPF)

Answer 23

A diagram that shows the combinations of two goods that are possible for a society to produce at full employment.