Economics Review

The study of ___ helps all of us to become more informed citizens and better decision makers

economics

study of how people try to satisfy their needs and wants through the used of limited resources

economics

market where productive resources are bought and sold

factor market

The ___ of production include land, labor, capital, and entrepreneurs

factors

A nation's wealth refers to a worth that can be expressed in dollars and cents.

false

The circular flow of economic activity describes an economy that is free of market.

false

The four factors of production are land, capital, labor, and financing.

false

The production possibilities frontier can be reached even if certain resources remain idle.

false

any good that lasts three years or more when used regularly

durable good

Economic interdependence limits a nation's growth and usually reduces the efficiency of production.

false, encourages

Division of labor increases efficiency because it allows workers to master many aspects of their jobs.

false, one

A nondurable good lasts for less than five years when sued on a regular basis.

false, three

economy is which consumers and privately owned businesses make the majority of the WHAT, HOW, and FOR WHOM decisions

free enterprise economy

item that is economically useful or that satisfies an economic want

good

basic requirement for survival

need

Economic products consist of both goods and services that are useful, relatively scarce, and transferable to others

true

Economics is a social science because it deals with how people behave while trying to satisfy their needs and wants through use of relatively scarce resources.

true

In economics, land refers to the natural resources needed for production, such as forests, minerals, and climate.

true

The paradox of value occurs when some necessities have little value, while some non-necessities have a much higher value.

true

Time is an opportunity cost when a manufacturer assigns workers to one task rather than to another.

true

When manufactured goods are used to produce other goods and services, they are called capital goods.

true

worth that can be expressed in dollars and cents

value

way of expressing a need that leads to a preference for some goods over others

want

sum of those economic products that are tangible, scarce, useful, and transferrable

wealth

Economic growth occurs when a nation's total output of the goods and services increases over time.

true

___ is a key measure of a nation's economic health

GDP

___ describes the concept that everything we do has a cost

TANSTAAFL

A popular model used to illustrate the concept of opportunity cost is a. the production possibilities frontier b. entrepreneurship c. the paradox of value

a

The situation in which some necessities have little value while some non necessities have a much higher value is known as a. paradox of value b. opportunity cost c. trade-offs

a

An economy at its production possibilities frontier is operating a. with slow economic growth b. at full potential c. without division of labor

b

Division of labor is a characteristic of a. home craft businesses b. assembly line production c. classroom education

b

Manufactured goods needed to produce other goods and services are called a. nondurable goods b. capital goods c. consumer goods

b

Actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of a. trade-offs b. specialization c. economic interdependence

c

The dollar value of all final goods and services and the most comprehensive measure of a country's total production output a. financial capital b. a cost-benefit analysis c. Gross Domestic Product (GDP)

c

The money used to buy the tools and equipment needed for production is known as a. the factors of production b. financial capital c. wealth

c

The study of economics is important because it enables us to a. describe our standard of living b. increase our consumption of consumer goods c. become better decision makers

c

To arrive at an economic decision, a decision making grid may be used to evaluate a. productivity b. only durable goods c. alternative choices of action

c

tools, equipment, machinery, and factories used in the production of goods and services

capital

manufactured goods that are used to produce other goods

capital good

process of using up goods and services to satisfy wants and needs

consumption

A ___ grid can be used to evaluate alternatives

decision-making

The study of economics helps people make better __

decisions

alternative choices made by consumers in the marketplace

trade-offs

people with all their efforts, abilities, and skills

labor

cost of the next best alternative use of money, time, or resources when one choice is made rather than another

opportunity cost

WHAT, HOW, and FOR WHOM to ___ are the three basic economic questions

produce

process of creating goods and services

production

diagram representing various combinations of goods and/or services that an economy can produce when all productive resources are fully employed

production possibilities frontier

When economic growth takes place, the ___ production possibility shifts outward, showing that more products are produced than before

production possibility fronteir

The opportunity cost of doing something is the next best alternative, or ___, that you give up

tradeoff

A production possibilities frontier shows the various possible combinations of output that can be produced when all ___ are fully employed

resources

condition of not having enough resources to produce all the things people want

scarcity

work that is performed for someone

service

quality of life based on the possession of the necessities and luxuries that make life easier

standard of living

Both goods and services are counted as part of a nation's wealth.

true