Are You Satisfied

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

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

To prepare for effective decision making and responsible citizenship

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

availability and demand.

In economics, capital goods include

buildings and equipment.

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

economic

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

economizing

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

natural; human

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

satisfaction

what two categories can wants be divided?

Economic and noneconomic

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 groups of words best describes wants:

Unlimited, changing, and competing

Friendship would be considered a(n) __________ want.

noneconomic

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

produced

A gap between unlimited wants and limited resources creates

scarcity.

What are the three basic economic questions?

What products will be produced, how will products be produced, and how will prod-ucts be allocated

The ultimate goal of all economic activity is

consumption

Distribution examines how income is divided between

producers and resource owners

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.

The heart of economics is

decision making