Unit 1

Question 1

Economics

Answer 1

The study of how people choose to utilize and distribute scarce resources to satisfy our needs and unlimited wants

Question 2

Sacristy

Answer 2

Scarcity is a situation that exists when there are not enough resources to meet human wants

Question 3

Macroeconomics

Answer 3

The study of the behavior of the economy as a
whole and involves topics such as inflation, unemployment, aggregate demand and aggregate
supply

Question 4

Microeconomics

Answer 4

The study of the behavior of individual units of the economy

Question 5

Theoretical economics

Answer 5

Economists use the scientific method to make generalizations and
abstractions to develop theories.

Question 6

Policy economics

Answer 6

These theories are then applied to fix problems or meet economic goals

Question 7

Economize

Answer 7

When you examine the costs and benefits of a choice as an aid to decision making

Question 8

Marginal cost

Answer 8

the cost of using one more unit of a good or service

Question 9

Marginal benifit

Answer 9

the satisfaction (utility) received from
using one more unit of a good or services

Question 10

Marginal analysis

Answer 10

making decisions based on
increments and analyzing additional benefits and additional costs.

Question 11

Utility

Answer 11

Utility (satisfaction), incentives and the choices we make influence our decisions

Question 12

Opportunity cost

Answer 12

The value of the next best alternative when you make a decision (Implicit Cost)

Question 13

Trade offs

Answer 13

The alternative you give up when making an economic choice

Question 14

Production possibilities curve

Answer 14

An economic model used to illustrate the impact of
scarcity on an economy by showing the maximum number of goods or services that can be produced using
limited resources.

Question 15

Efficiency

Answer 15

the condition in which economic resources
are being used to produce the maximum amount of
goods and services

Question 16

Underutilized

Answer 16

the condition in which economic
resources are not being used to their full potential

Question 17

Competitive advantage

Answer 17

when a product can be produced at a lower
opportunity cost

Question 18

Absolute advantage

Answer 18

When a country can produce more of the product than any other producer

Question 19

Factors of production

Answer 19

The economic resources needed to
produce all goods and service

Question 20

Entrepreneurship

Answer 20

the combination of vision, skill, ingenuity and willingness to take risks that is needed to create and run new businesses

Question 21

Labor (Human Resources)

Answer 21

all the human time, effort and talent
that go into the making of products.

Question 22

Labor(natural resources)

Answer 22

includes all the natural resources found on or under the ground that are used to produce goods and servic

Question 23

Capital

Answer 23

property used to produce and distribute other goods and services

Question 24

Goods

Answer 24

Physical objects that can be
purchased

Question 25

Services

Answer 25

Work that one person performs for another for paymen

Question 26

Consumer

Answer 26

A person who buys goods or services for personal use

Question 27

Producer

Answer 27

A person who makes goods or provides services

Question 28

Circular flow model

Answer 28

An illustration which shows the flow of economic activity in a market economy Buying and selling of RESOURCES and GOODS and SERVICES Resource,

Question 29

Capitalist/market economy

Answer 29

Adam Smith’s system where individuals pursue profit with minimal government interference. The economy relies on supply and demand, competition, and private ownership, favored by the middle and upper classes.

Question 30

Communism/command economy

Answer 30

Marx and Engels’ system where the government owns everything, plans the economy, and aims for a classless society, favored by the poor but often lacks incentives.

Question 31

Traditional economy

Answer 31

An economic system where families or tribes make decisions based on customs and beliefs passed down through generations. The focus is on survival and the community rather than individuals, with individuals deciding production and distribution. It allows freedom of choice but is resistant to change and generally less productive.