Vocabulary
The condition of limited resources combined with unlimited wants.
What is scarcity?
Work done by someone else for which a consumer, business, or government is willing to pay.
What are services?
Natural resources used to produce goods and services are called.
What is land?
When we maximize the utility of our decisions we are doing this
What is making decisions that we expect will make us better off?
This famous musician from The Rolling Stones was once a student of economics.
Who is Mick Jagger?
The tools, machines, and buildings used to produce goods and services; one of the factors of production.
What is physical capital?
A measure of the efficiency with which goods and services are produced. Often stated as the quantity produced, per person, per hour.
What is productivity?
One way that a business can raise its productivity is by
What is getting more outputs from the same inputs?
OR
Getting the same output from fewer inputs.
In the classic guns-versus-butter tradeoff, what happens when a society chooses to produce guns (military goods) instead of butter (civilian goods)?
What is society maximizes its security, but lowers its standard of living.
A graph that shows how an economy might use its resources to produce two goods
What is a production possibilities frontier (PPF) graph?
Physical objects produced for sale or use
What are goods?
The value of the next best alternative that is given up when you make a choice. This is the measure of what you must give up to get what you most want.
What is opportunity cost?
Which statement about a country's human capital is true?
A. The lower the level of human capital, the richer the nation will be.
B. A country with high human capital is a wealthier nation.
C. A nation's human capital is the least important form of capital in creating wealth and growth.
D. There is no correlation between a country's human capital and its standard of living.
B. A country with high human capital is a wealthier nation.
The opportunity cost of a decision is
What is the value of the best thing you gave up to get what you want.
One modern example of capital replacing labor is
A. a student who continued her education and delays entering the workforce
B. a worker who takes a minimum-wage job
C. an entrepreneur starting a new business
D. a robot in an automobile assembly plant
D. a robot in an automobile assembly plant
The resources used to produce goods and services.
What are factors of production?
False, it can be measured in terms of time, money, effort, experience, knowledge, etc.
To an economist, the word capital includes what?
What is the tools, machines, and buildings used in the production of other goods and services
Which scenario would be an example of the law of diminishing marginal utility?
A. eating your final slice of an extra-large pizza with all the toppings
B. a homeless person picking a dollar bill up from the sidewalk
C. drinking your first glass of apple juice after a strenuous workout
D. putting on a warm coat when it's cold outside
A. eating your final slice of an extra-large pizza with all the toppings
What does it mean if an economy is at its production possibility frontier, meaning on the line?
The economy is operating at full potential, no resources unemployed.
Someone with the willingness and ability to take risks involved in starting and managing a business is called this
What is an entrepreneur?
A temporary condition that occurs when there is less of a good or service available that people want at the current price.
What is a shortage?
Using resources wisely and without waste is called ____________.
What is efficiency?
This is a lack of pleasure or satisfaction from consuming a product or service or taking an action; the opposite of utility.
What is negative utility?
What is the opportunity cost of going to college rather than starting work immediately after high school?
What is the lost wages and work experience from the job you would have taken?