unit 1

the ultimate goal of all economic activity is

consumption

People are considered to be __________ resources

human

best reason for studying economics

prepare for effective decision making and responsible citizenship in society

unlimited wants and limited resources creates a condition known as

scarcity

into what two categories can wants be divided?

Economic and noneconomic

Which one of the following groups of words best describes wants

Unlimited, changing, and competing

What are the three basic economic questions?

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

Water and air are examples of __________ resources

natural

Friendship would be considered a(n) __________ want.

noneconomic

Distribution examines how income is divided between

owners and producers

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

produced

The heart of economics is

resources.

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

satisfaction

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

trade-off.

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

economic

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

distrabution

Why are resources considered limited?

There are not enough available so that everyone can have as much of them as desired.

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

availability and demand

In economics, the term capital goods includes

buildings and equipment