Vocab Wk1

Question 1

Choices

Answer 1

The ability of a consumer or a producer to decide which product or service to purchase or provide from a range of options

Question 2

Comparative Advantage

Answer 2

When a country can produce a good at a lower cost in terms of other goods; or, when a country has a lower opportunity cost of production.

Question 3

Factors of Production

Answer 3

The resources such as labor, materials, and machinery that are used to produce goods and services; also called inputs.

Question 4

Law of Increasing opportunity costs

Answer 4

An economic principle that states opportunity costs increase as you allocate more factors of production to each additional product or service being produced.

Question 5

Margin

Answer 5

The amount by which one more product or service is being increased or decreased.

Question 6

Opportunity Cost

Answer 6

Measures cost by what we give up/forfeit in exchange; opportunity cost measures the value of the forgone alternative.

Question 7

Production Possibilities Model

Answer 7

An economic model that examines how much of a product or service can be produced based upon the factors of production.

Question 8

Scarcity

Answer 8

When human wants for goods and services exceed the available supply.

Question 9

Trade

Answer 9

The voluntary exchange of products and services between economic agents such as consumers, producers, or nations.