Economics Final Study Guide Questions
with correct answers.
scarcity ANS - limited quantities of resources to meet unlimited wants
shortage ANS - a situation in which a good or service is unavailable; a sutiatuion in which the quantity
demanded is greater than the quantity supplied; excess demand
factors of production ANS - land, labor, and capital; the three groups of resourcs that are usedt o make
all goods and services
guns or butter ANS - a phrase that refers to the trade-off that nations face when choosing whether to
produce more or less military or conusmer goods
opportunity cost ANS - the most desirable alternative given up as the result of a decision
trade-offs ANS - an alternative we sacrifice when we make a decision
thinking at the margin ANS - deciding whether to do or use one additional unit of some resource
production possibilities curve ANS - a curve that shows alternative ways to use an economy's resources
production possibilities frontier ANS - the line on a production possibilities graph that shows the
maximum possible output for a specific economy
efficiency ANS - using resources in such a way as to maximize the production of goods and services
, underutilization ANS - using ffewer resources than an economy is capable of using
Economic Question 1 ANS - What goods and services should be produced?
Economic Question 2 ANS - How should these goods and services be produced?
Economic Question 3 ANS - Who consumes these goods and services?
factor payments ANS - the income people receive for supplying factors of production
traditional economy ANS - economic system that relies on habit, custom, or ritual to decide questions of
production and consumption of goods and services
centrally planned economy ANS - economic system in which the central government makes all decisions
on the production and consumption of goods and services
market economy ANS - economic system in which decisions on production and consumption of goods
and services are based on voluntary exchange in markets
mixed economy ANS - economic system that combines the free market with limited government
involvement
self-interest ANS - one's own personal gain
specialization ANS - the concentration of the productive efforts of individuals and firms on a limited
number of activities
public disclosure laws ANS - laws requiring companies to provide full information about their products
indicators of economic stability ANS - general price levels; health of the nation's financial institutions
with correct answers.
scarcity ANS - limited quantities of resources to meet unlimited wants
shortage ANS - a situation in which a good or service is unavailable; a sutiatuion in which the quantity
demanded is greater than the quantity supplied; excess demand
factors of production ANS - land, labor, and capital; the three groups of resourcs that are usedt o make
all goods and services
guns or butter ANS - a phrase that refers to the trade-off that nations face when choosing whether to
produce more or less military or conusmer goods
opportunity cost ANS - the most desirable alternative given up as the result of a decision
trade-offs ANS - an alternative we sacrifice when we make a decision
thinking at the margin ANS - deciding whether to do or use one additional unit of some resource
production possibilities curve ANS - a curve that shows alternative ways to use an economy's resources
production possibilities frontier ANS - the line on a production possibilities graph that shows the
maximum possible output for a specific economy
efficiency ANS - using resources in such a way as to maximize the production of goods and services
, underutilization ANS - using ffewer resources than an economy is capable of using
Economic Question 1 ANS - What goods and services should be produced?
Economic Question 2 ANS - How should these goods and services be produced?
Economic Question 3 ANS - Who consumes these goods and services?
factor payments ANS - the income people receive for supplying factors of production
traditional economy ANS - economic system that relies on habit, custom, or ritual to decide questions of
production and consumption of goods and services
centrally planned economy ANS - economic system in which the central government makes all decisions
on the production and consumption of goods and services
market economy ANS - economic system in which decisions on production and consumption of goods
and services are based on voluntary exchange in markets
mixed economy ANS - economic system that combines the free market with limited government
involvement
self-interest ANS - one's own personal gain
specialization ANS - the concentration of the productive efforts of individuals and firms on a limited
number of activities
public disclosure laws ANS - laws requiring companies to provide full information about their products
indicators of economic stability ANS - general price levels; health of the nation's financial institutions
