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the factors of production are

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land, labor, and capital

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a situation in which a good or service is unavailable is called

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a shortage

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the skills and knowledge gained by a worker through education, and experience

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human captial

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the line on a production possiblities graph that shoes the maximum possible output is called

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a production possibilities frontier

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the three groups of resources that are used to make all goods and services are called

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the factors of production

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using resources in such a way as to maximize the production of goods and services is called

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efficiency

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the effort that people devote to a task for which they are paid is called

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labor

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law that states that as we shift factors from making one good or service to another, the cost of producing the second item increases is called the

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law of increasing cost

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limited quantities of resources to meet unlimited wants is called

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scarcity

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physical objects such as clothes or shoes are called

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goods

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a phrase that refers to the trade-offs that nations face when choosing to produce more or less military or consumer goods is called

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guns or butter

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all human-made goods that are used to produce other goods ands, tools and buildings

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physical capital

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an ambitious risk taking leader who combines land, labor, and capital to create and market new goods and services

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entrepreneur

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to an economist the alternative that is given up because of a decision is called

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cost

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deciding whether to do or use one more additional unit of some resources is called

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thinking at the margin

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a graph that shows alternative ways to use an economy's resources is called

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a production possibilities curve

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actions or activities that one person performs for another are called

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services

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the study of how people seek to satisfy their eneds and wants by making choices is called

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economics

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any human-made resource that is used to creat other gooods and services is called

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capital

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an alternative that we sacrifice when we make a desicsion is called

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a trade-off

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using fewer resources than an economy is capable of using is called

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underutilization

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something like air, food or shelter that is necessary for survival is called

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a need

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the natural resources that are used to make goods and services are

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land

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To what part of an industry does a woker's education contribute?

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human capital

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What is the difference between a shortage and scarcity?

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a shortage is a lack of all goods and services; scarcity concerns a single item

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What does an economist mean by the term land?

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all natural resources used to produce goods and services

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Which of the following is an entrepreneur?

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a person who starts an all-organic cleaning supplies business that employs others

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Which of the following are factors of production?

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capital and land

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Which of the following is an example of using physical capital to do a job?

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building extra space in a factory to simplify production

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Making a decision at the margin is possible only in situations where

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the available alternatives can be divided into increments

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A decision is made at the margin when each alternative considers

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cost and benefit ranked in progressive units

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The economic concept of guns or butter means that

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a government must decide whether to produce more or less military or consumer goods

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A decision-making grid is a visual way of

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examining opportunity costs

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Every decision involves trade-offs because

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everyone's resources are limited

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If a person want to buy a smart phone has just enough to buy one, and chooses choice A instead of choice B, then choice B is the

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opportunity cost

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All of the following are trade-offs for s student who spends a semester abroad EXCEPT

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experiencing the culture of another country

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An economy that is NOT using all its resources to gain the maximum possible production is

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underutilized

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The line on a production possibilities curve showing the relative amounts of two types of goods produced using all resources is called the

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production possibilities frontier

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Increasing the number of laborers in an economy generally causes a(n)

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increase in the production possibilities curve

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The curve usually seen in a production possibilities frontier can be explained by

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the law of increasing costs

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A production possibilities curve shoes the relationship between the production of

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any two categories of goods

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An economy that is producing the maximum amount of goods and services is

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efficient

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The law of increasing cost means that as production shifts from one item to another

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more and more resources are necessary to increase production of the second item

Ch. 1 Economics – Flashcards

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