Economics Chapter 1 Test Questions – Flashcards
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the study of the choices that people make to satisfy their needs and wants
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economics
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a person who studies economic choices.
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economist
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the study of the choices made by economic actors such as households, companies, and individual markets.
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microeconomics
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microeconomics can focus on large ___ in the economy - the production at one company is considered a microeconomic topic because only a single economic actor is involved
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participants
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examines the behavior of entire economies (ex. unemployment in the US)
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macroeconomics
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economists pay attention to ___, where they observe who makes them and how they are made
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economic decisions
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who makes economic decisions?
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we do
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how many groups of economic decision makes are out there?
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two
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people who decide to buy things
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consumers
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the people who make the things that satisfy the consumers' needs and wants
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producers
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is the basis of all economic systems
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consumers and producers
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how do you make decisions?
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needs and wants
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economists classify as needs goods and services that needed for...
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survival
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are goods and services that people consume beyond what is necessary for survival
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wants
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physical objects that can be purchased
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goods
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actions or activities that are performed for a fee
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services
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who are also interested in the environment in which people make decisions?
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economists
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anything that people use to make or obtain what they need or want
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resource
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resources that can be used to produce goods and services
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factors of production
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the 4 categories of the factors of production
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natural, human, capital resources and entrepreneurship
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items that are provided by nature (on the earth or in the earth's atmosphere)
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natural resources
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a natural resource is considered a factor of production only when it is scarce and some payment is necessary for its use.
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scarce and payment is needed
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any human effort exerted during production (physical or intellectual - workers, ministers etc)
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human resources
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manufacture materials used to create products
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capital resources
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capital resources also include capital ___ and ___ to purchase them
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goods and money
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buildings, structures, machinery, and tools used in the production process.
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capital goods
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the goods and services that people buy
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consumer goods
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some products can either be _____ or ____ depending on how they are used
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capital goods or consumer goods
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the use of technical knowledge and methods to create new products or make existing products more efficiently
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technology
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the combination of organizational abilities and risk taking involved in starting a new business or introducing a new product
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entrepreneurship
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develop a new mix of the other factors of production, creating something of value
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goal of entrepreneurship
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a person who attempts to start a new business or introduce a new product (risking economic failure in return for a possible financial gain)
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entrepreneur
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the combination of limited economic resources and unlimited wants results in a condition known as...
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scarcity
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scarcity is the ___ ___ ____ of economics, because it forces people to make decisions about how to use resources effectively
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most basic problem
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distribute
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allocate
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three basic economic questions
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what, how, and for whom to produce
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the answers to the economic questions help a society determine the best distribution of resources to meet its
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needs and wants
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A society's needs and wants can never be met completely, thats why the society's economic system must determine the ___ of those needs and wants
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urgency
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after making all th decisions, a society must carry out those decisions and make sure their resources are being used ____ as possible.
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effectively
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is the level of output that results from given a level of input
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productivity
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economists determine if resources are being used wisely by studying...
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productivity
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the use of the smallest amount of resources to produce the greatest amount output
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efficiency
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assigning a small number of tasks to each worker.
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division of labor
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allows each employee to work faster to produce a greater number of alarm clocks
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specialization
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producers and consumers agree to provide one type of item in return for another
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exchange
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three forms of exchange
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money, barter, and credit
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people exchanged one set of goods for another
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barter
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because of the ___ with barter, it lead to the development of a standardized means of exchage
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difficulties
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any item that is readily accepted by people in return for goods and services.
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money
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in many societies people can use ___ for money
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shells and beads
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1) standardized item that is generally traded for goods or services 2) a measure of value that allows both producers and consumers to determine and express worth 3) a store of value that can be saved and used to purchase items at a later date
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money's functions
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allows consumers to use items before completing payment for the merchandise, over a specified amount of time
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credit
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in order to avoid the problems of barter, goods and services are assigned ____ that can be expressed as an amount of money, or price
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value
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which is more expensive needs or wants?
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wants
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what value is also determined by or usefulness to a person // which can be more difficult to determine than scarcity, because on person may find it useful while others will not
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utility
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when a person can fulfill all of their needs without outside assistence. which is rare because resources are limited
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self-sufficiency
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to produce everything you needed would require ....
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tools, equipment, raw materials
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instead of being self-sufficient people tend to..
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specialize in certain areas
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the reliance among economic actors
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interdependance
