Economics – Fundamental Unit (Correct answers)
Economics correct answers 1. The study of how individuals and nations make choices
about ways to use scarce resources to fulfill their needs and wants
2. Social science that deals with the study of the production, consumption, distribution of
goods and services and the transfer of wealth to obtain those goods and services.
Scarcity correct answers a situation in which unlimited wants exceed the limited
resources available to fulfill those wants
Trade-offs correct answers giving up one thing in favor of another
Opportunity costs correct answers the highest-valued alternative that must be forgone
when a choice is made
Rational decisions correct answers choice in which you weigh the costs and benefits of
each option
Marginal benefit correct answers the additional satisfaction or benefit received when
one more unit is produced
Marginal cost correct answers the cost of producing one more unit of a good.
Marginal benefit-marginal cost analysis correct answers rational decision making
involves marginal benefits that equal or exceed the marginal costs
Resources correct answers anything that is used to produce goods or services
Allocation of resources correct answers decision on how to divide scarce resources
among different uses
Goods correct answers tangible products that we use to satisfy our wants and needs
Services correct answers actions or activities that one person performs for another
Factors of production correct answers land, labor, capital, entrepreneurship
Capital goods correct answers Buildings, machines, technology, and tools needed to
produce goods and services.
Human capital correct answers the skills and knowledge gained by a worker through
education and experience
Producers correct answers individuals and organizations that determine what products
and services will be available for sale.
, Consumers correct answers people who buy goods and services
entrepreneur correct answers (n.) a person who starts up and takes on the risk of a
business
barter correct answers To exchange goods or services without the use of money
production possibilities curve correct answers A graphical representation that shows the
possible combinations of two products that an economy can produce, given that its
productive resources are fully employed and efficiently used.
division of labor correct answers the process of dividing work into specialized jobs that
are performed by separate individuals
assembly line correct answers Production method that breaks down a complex job into
a series of smaller tasks
imports correct answers goods and services purchased from other countries
exports correct answers Goods and services sold to other countries.
voluntary exchange correct answers the act of buyers and sellers freely and willingly
engaging in non-fraudulent market transactions. Both parties should benefit from the
exchange.
non-fraudulent exchange correct answers without fraud/without deceiving; honest,
voluntary exchange
economic systems correct answers The ways in which a society answers the three
basic economic questions to organize production, distribution, and consumption of
goods and services to solve the economic problem of scarcity
3 basic economic questions correct answers Every economic system must answer the
three basic economic questions: What to produce; How to produce it? For whom to
produce?
command economy correct answers a system in which the central government makes
all economic decisions
traditional economy correct answers An economy in which production is based on
customs and traditions and economic roles are typically passed down from one
generation to the next--usually subsistence agriculture
market economy correct answers a system based on private ownership, free trade
between buyers and sellers, and competition
Economics correct answers 1. The study of how individuals and nations make choices
about ways to use scarce resources to fulfill their needs and wants
2. Social science that deals with the study of the production, consumption, distribution of
goods and services and the transfer of wealth to obtain those goods and services.
Scarcity correct answers a situation in which unlimited wants exceed the limited
resources available to fulfill those wants
Trade-offs correct answers giving up one thing in favor of another
Opportunity costs correct answers the highest-valued alternative that must be forgone
when a choice is made
Rational decisions correct answers choice in which you weigh the costs and benefits of
each option
Marginal benefit correct answers the additional satisfaction or benefit received when
one more unit is produced
Marginal cost correct answers the cost of producing one more unit of a good.
Marginal benefit-marginal cost analysis correct answers rational decision making
involves marginal benefits that equal or exceed the marginal costs
Resources correct answers anything that is used to produce goods or services
Allocation of resources correct answers decision on how to divide scarce resources
among different uses
Goods correct answers tangible products that we use to satisfy our wants and needs
Services correct answers actions or activities that one person performs for another
Factors of production correct answers land, labor, capital, entrepreneurship
Capital goods correct answers Buildings, machines, technology, and tools needed to
produce goods and services.
Human capital correct answers the skills and knowledge gained by a worker through
education and experience
Producers correct answers individuals and organizations that determine what products
and services will be available for sale.
, Consumers correct answers people who buy goods and services
entrepreneur correct answers (n.) a person who starts up and takes on the risk of a
business
barter correct answers To exchange goods or services without the use of money
production possibilities curve correct answers A graphical representation that shows the
possible combinations of two products that an economy can produce, given that its
productive resources are fully employed and efficiently used.
division of labor correct answers the process of dividing work into specialized jobs that
are performed by separate individuals
assembly line correct answers Production method that breaks down a complex job into
a series of smaller tasks
imports correct answers goods and services purchased from other countries
exports correct answers Goods and services sold to other countries.
voluntary exchange correct answers the act of buyers and sellers freely and willingly
engaging in non-fraudulent market transactions. Both parties should benefit from the
exchange.
non-fraudulent exchange correct answers without fraud/without deceiving; honest,
voluntary exchange
economic systems correct answers The ways in which a society answers the three
basic economic questions to organize production, distribution, and consumption of
goods and services to solve the economic problem of scarcity
3 basic economic questions correct answers Every economic system must answer the
three basic economic questions: What to produce; How to produce it? For whom to
produce?
command economy correct answers a system in which the central government makes
all economic decisions
traditional economy correct answers An economy in which production is based on
customs and traditions and economic roles are typically passed down from one
generation to the next--usually subsistence agriculture
market economy correct answers a system based on private ownership, free trade
between buyers and sellers, and competition
