WEEK 2

Question 1

is a social science that
focuses on the production, distribution,
and consumption of goods and
services,

Answer 1

Economics

Question 2

There are simply never enough resources to meet all our needs and desires.

Answer 2

Scarcity

Question 3

obtain something that’s desired.

Answer 3

Opportunity Cost

Question 4

work required to
produce a good or service is separated
into tasks performed by different workers

Answer 4

Division of Labor

Question 5

workers or firms
focus on tasks for which they have an
advantage within the overall production
process (special skills, talents, and
interests)

Answer 5

Specialization

Question 6

focuses on the actions of individual agents within the economy

Answer 6

Microeconomics

Question 7

studies the economy as a whole.

Answer 7

Macroeconomics

Question 8

which involves policies that affect bank lending interest rates, and financial
capital markets, is conducted by a nation’s central bank.

Answer 8

Monetary Policy

Question 9

which involves government spending and taxes, is determined by a nation’s
legislative body.

Answer 9

Fiscal Policy

Question 10

brings together buyers and sellers of goods and services.

Answer 10

Market

Question 11

decisions about that products are available and at what prices are
determined through the interaction of supply and demand.

Answer 11

Market Economy

Question 12

has a large numbers of buyers and sellers, so no one can control the
market price.

Answer 12

Competitive Market

Question 13

government does not intervene in any way.

Answer 13

Free Market

Question 14

willing and able to purchase at
each price.

Answer 14

Demand

Question 15

buyer pays for a unit of a specific
good or service.

Answer 15

Price

Question 16

total number of units
purchased at a specific price.

Answer 16

Quantity Demanded

Question 17

other things
being equal, a higher price typically leads to a
lower quantity demanded.

Answer 17

Law of Demand

Question 18

shows the relationship
between quantity demanded and price in a given
market on a graph (right).

Answer 18

Demand Curve

Question 19

says that a higher
price typically leads to a higher
quantity supplied.

Answer 19

Law of Supply

Question 20

shows the
relationship between quantity supplied
and price on a graph.

Answer 20

Supply Curve

Question 21

they mean only a certain point on the supply
curve, or one quantity on the supply schedule.

Answer 21

Quantity Supplied

Question 22

occur where the supply and demand curves
cross since the quantity demanded is equal to the quantity supplied.

Answer 22

Equilibrium Price and Equilibrium Quantity

Question 23

When the price is below the equilibrium
level, excess demand?

Answer 23

Shortage

Question 24

If the price is above the equilibrium level,
excess supply

Answer 24

Surplus