Economics Module 1-3 Test 1

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Scarcity
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exists if we desire more of something than we can have.
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Tradeoff
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You make a _______ when you give up one thing to get something else.
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Opportunity cost
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of a choice is the value of the next-best alternative given up when that choice is made.
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Society
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is a collection of people who share a common bond, such as those living in a city, a country, or even the entire world.
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Needs
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are minimal requirements of things such as food, water, and shelter that are necessary for survival.
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Wants
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are things that are desired but are not essential to life.
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Economy
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is a system for coordinating the production and distribution of goods and services.
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Goods
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are physical items produced in an economy, such as jeans, tennis rackets, popcorn, cars, and homes.
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Services
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are activities produced in an economy, such as education, entertainment, and health care.
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Resources
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are the basic elements from which all goods and services are produced.
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Land
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is anything drawn from nature for use in the production of goods or services.
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land, labor, capital, and entrepreneurship.
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Economists classify resources into four types:
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Labor
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is the time and effort people contribute to the production process.
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Capital
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is anything long lasting that is created by humans for use in production.
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Physical Capital
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is any long-lasting good that is used to make other goods or services.
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Human Capital
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refers to the skills and knowledge of workers.
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Entrepreneurship
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is the willingness of people to organize, operate, and assume the risks involved with business ventures.
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Inputs
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include the four types of resources-land, labor, capital, and entrepreneurship along with anything made with these resources that is then used to make something else, such as cement, steel, lumber, and plastic.
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Model
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is a simplified representation of reality. ______ help you focus on a few aspects of the real world by stripping away nonessential details.
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Production Possibilities Frontier (PPF)
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is a curve that shows the maximum quantity of one good that can be produced for each possible quantity of another good produced.
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Law of increasing opportunity cost
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states that the opportunity cost of a good rises as more of the good is produced.
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Efficient
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An economy is ______ if there is no opportunity to make someone better off without making anyone else worse off.
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Economic growth
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is an increase in the ability to produce goods and services over time.
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Microeconomics
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is the study of how people make decisions and how those decisions affect others in the economy.
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Macroeconomics
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is the study of the economy as a whole.
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Sleep. Must trade off doing things with friends, homework, or watching tv to get more sleep.
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Name a good that is scarce for you. What tradeoff must you make to get it?
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My opportunity cost would be doing homework because that is what I am choosing not to do when I choose to go to the movies.
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What is your opportunity cost if you go to the movies tonight?
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A need is something that you cannot live without, food, water, shelter, and a want is something you desire but do not need
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What is the difference between a need and a want?
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Land, Labor, Capital, Entrepreneurship
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Name the four types of resources.
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PPF represents the most possible productivity in an economic system.
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What does a production possibilities frontier represent?
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Economics
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the study of how individuals, families, businesses, and governments use limited resources to fill unlimited wants is the study of how people make choices to satisfy their needs and wants is the study of choice under conditions of scarcity.

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