Vocab #1
Basic requirements for human survival
What are needs?
The study of scarcity and choice
Economics
Which is not one of the three key economic questions?
Why do we produce goods and services?
How should goods and service be produced?
Who consumes the goods and services?
What goods and services should be produced?
1. Why do we produce goods and services?
A benefit of technology is that it
Makes certain jobs obsolete.
Increases a nation’s productivity.
Slows or stops production.
Decreases a nation’s GDP.
2. Increases a nation’s productivity.
Land, labor, and capital; the three groups of resources that are used to make all goods and services
Factors of Production
Desires that can be satisfied by consuming a good or service
Wants
A person who starts up and takes on the risk of a business
Entrepreneur
What is necessary to ensure increased standards of living?
Security
Stagnation
Equity
Innovation
4. Innovation
Each of these is a principle of free enterprise except
Private Property.
Legal Equality.
Voluntary Exchange.
Public Welfare.
4. Public Welfare
The cost added by producing one additional unit of a product or service.
Marginal Cost
The development of skills in a specific kind of work; division of labor
Specialization
The line on a production possibilities graph that shows the maximum possible output
Production Possibilities Frontier
Which economic system most values the goal of freedom?
Command
Traditional
Mixed
Free Market
4. Free Market
Decision Grids are valuable tools because they help us
1. Weigh benefits against opportunity costs.
2. Understand maximum production capabilities.
3. Realize that trade-offs are unnecessary.
4. Solve problems when only two options exist.
1. Weigh benefits against opportunity costs.
Which describes human capital?
Buildings and tools
Skills and knowledge
Land and labor
Slowing or stopping production
The limited nature of society's resources
Scarcity
Raw materials from nature that are used to produce goods
Natural Resources
In which type of economic system is consumer sovereignty most valued?
Free Market
Command
Traditional
Mixed
1. Free Market
In which type of economic system do firms, consumers, and the government answer the key economic questions?
Mixed
Command
Traditional
Free Market
1. Mixed
One way a business can incentivize increased output is by
Focusing on producing fewer products.
Paying all employees equally.
Paying those who work harder more.
Increasing the work week by one day.
3. Paying those who work harder more.
The principle that people may decide what, when, and how they want to buy and sell
Voluntary Exchange
The most desirable alternative given up as the result of a decision
Opportunity Cost
How does specialization relate to voluntary exchange?
When we become overly specialized, exchange ceases to be voluntary.
There is enough division of labor in one nation to make trading pointless.
Specialization enables us to make decisions about what is best to produce and what is best to trade.
Trading weakens us by making us dependent on other nations.
3. Specialization enables us to make decisions about what is best to produce and what is best to trade.
We must have land, labor, and capital to produce. What do we call these necessities collectively?
Factors of Production
Collective Bargaining
Human Capital
Physical Capital
1. Factors of Production
What is an international public good?
Peace
Tariffs
Trade Wars
National Parks
1. Peace