Basic Vocabulary
This is the study of how people seek to satisfy their needs and wants by making choices, or the study of how we make choices when faced with a limited supply of resources.
Economics
Economists use what term to describe the way they show the maximum combinations of goods and services that can be produced from a fixed amount of resources in a given period of time?
Productions Possibilities curve
What are the 4 factors of production?
Land, Labor, Capital, and Entrepreneurship
This refers to the use of resources in a way that produces the most goods and services.
efficiency
An economist would define “needs” as...
Something the person does require for their basic survival.
This is the most basic economic problem. Our wants are greater than what is available and it forces us to decide what is most important to us.
scarcity
A point inside the PPC curve indicates what?
underutilization or inefficiency
This is sometimes referred to as a 5th factor of production.
Technology
The branch of economic theory that deals with behavior and decision making by small units such as individuals and firms is called ________
Microeconomics
An economist would define “wants” as...
Something the person does not require for their basic survival.
These are the alternatives we give up when we choose one course of action over another.
trade-offs
Efficiency
The farm that a potato chip company uses to supply potatoes for its chips would be an example of which factor of production.
The branch of economic theory that deals with behavior and decision making by larger units such as governments is called ________
Macroeconomics
This refers to the use of fewer resources than an economy is capable of using.
underutilitzation
This refers to the most desirable alternative given up as the result of a decision.
opportunity cost
A point outside of the PPC curve indicates what?
Impossibility
The farmer who grows the potatoes for a potato chip company is an example of what factor of production?
Labor
A classic example for explaining production possibilities is the trade off between military defense and civilian goods.
Guns vs. Butter
Mary has a test tomorrow and needs to study. She also wants to go to the movies. What is her opportunity cost if she goes to the movies.
Time to study or possibly her grade on the test
What is the difference between a good and a service?
A good is tangible, but a service is intangible.
Economists come up with a hypothesis and test their theories, trying to find useful real-world applications for economic concepts. This is most similar to what other process?
The scientific method
Which factor of production would the machines that make the potato chips be an example of?
Capital
What is not an example of scarcity?
Something that is only temporary.
You find $15. You really want some Taco Bell, but you also need gas in your car. You decide to put gas in our car and eat something at home. What was your “opportunity cost?”
the Taco Bell