module 5 (part 1)

Michelle is trying to decide which goods and services to purchase so that she can get maximum satisfaction. Michelle is

economizing

Identify and describe three categories of resources.

natural, economic, and human

Water and air are examples of __________ resources, while people are considered to be __________ resources.

natural; human

Limited resources are those that are

scarce

The gap between unlimited desires for products and limited resources is known as

scarcity

What do consumers, producers, and the owners of resources do with money payments to create a flow of resources, goods, services, and money payments?

Exchange

Why are resources considered limited?

There are not enough available for everyone to have as much of them as desired.

Which of the following is the best reason for studying economics:

To prepare for effective decision making and responsible citizenship

What is opportunity cost?

the loss of potential gain from other alternatives when one alternative is chosen

What is scarcity?

the state of being scarce or in short supply; shortage

Which one of the following groups of words best describes wants:

unlimited, changing, completing

Explain the three basic economic questions that all societies must answer.

what will be produced? How will the products be produced? How will it be allocated?

Discuss the role of trade-offs in economic decision making.

giving up all or part of one thing in order to get something else

Economics involves decision making because most individuals must determine

how to get the most with the least

In economics, capital goods include

labor and management

John only had $40 to spend and couldn't decide whether to buy a new pair of jeans or to go to an amusement park. He finally decided to spend his money on the amusement park. What was the opportunity cost of his decision?

new pair of jeans

Friendship would be considered a(n) __________ want.

noneconomic

When a choice is made about the best use of resources, the alternative that is given up is called the __________ of that choice.

opportunity cost

In order for consumption to occur, goods and services must be

produced

Distribution examines how income is divided between

producers and resource owners

Consumers are typically most willing to pay more for goods and services that bring them greater

satisfaction

Describe the concept of economizing.

spend less; reduce one's expenses

What is distribution?

the action of sharing something out among a number of recipients.

What is consumption?

the use of goods and services by households

A manager is willing to accept the production of fewer products as long as her workers produce higher quality products. The manager is making a(n)

trade-off

What is economics?

unlimited wants with limited resources

What are the three basic economic questions?

What products will be produced, how will products be produced, and how will products be allocated

Which of the following factors has an influence on the monetary value of resources:

Productivity

Which of the following is an economic activity:

Purchasing a candy bar

Seeing a movie at a theatre would be considered a(n) __________ want.

economic

The desire for an item that has monetary value is a(n) _________ want.

economic

Into what two categories can wants be divided?

economic and noneconomic

Distinguish between economic and noneconomic wants.

economic wants cost money and non economic wants are free

The study of how to meet unlimited wants with limited resources is

economics

Making the best use of limited economic resources is called

economizing

Justin is trying to decide whether he wants to spend a $50 birthday check on a new DVD player or tickets to a concert. If he chooses the DVD player, what is the opportunity cost of this decision?

Concert tickets

The heart of economics is

decision making

What is exchange

an act of giving one thing and receiving another (especially of the same type or value) in return.

Two factors involved in determining the value of a resource, good, or service are

availability and demand

The ultimate goal of all economic activity is

consumption