Econ Chapter 1

People's needs are limited.

false

People's skills, abilities, health, knowledge, and motivation all add up to entrepreneurship.

false

A can of soup is an example of a

nondurable good

All human made goods that are used to produce other goods, tools and buildings:

physical capital

In the context of the production possibilities frontier, opportunity cost refers to

the value of the next best alternative

Consumers are powerful because

they drive decisions about what to produce

When deciding how to use resources, you need to evaluate the costs and benefits of each choice to decide which meets your criteria. These are called

trade-offs

Economic growth is an increase in a nation's output of goods and services over time.

true

Scarcity is an economic problem with which all societies are faced.

true

Separation of tasks to be performed by different works is division of labor.

true

A nation's wealth is made up of

?

Division of labor is practiced because

?

Paradox of value refers to:

High value of nonessential item, low value of essential item

In all societies, the government decides what to produce.

false

Consumers are powerful because:

They drive decisions about what to produce

A graph that shows alternative ways to use an economy's resources is called:

a production possibilities curve

An alternative that we sacrifice when we make a decision is called:

a trade off

Which of the following would result in a change in the production possibilities frontier in the mythical country of Alpha?

all of the answers

The study of economics involves:

all of the answers (exploring how people deal with the problem of scarcity, studying how things are....)

Why are all goods and services scarce:

all resources are scarce

The most desirable alternative given up as the result of a decision is called:

an opportunity cost

Japan employs more people than machines to produce goods.

false

A car is an example of a

durable good

When a nation's total output increases over time, the nation experiences:

economic growth

An ambitious risk taking leader who combines land labor and capital to create a new service:

entrepreneur

Which of the factors of production involves taking risks and combining resources to produce a good or service?

entrepreneurs

Both goods and services are both counted as wealth.

false

Economic growth leads the production possibilities frontier to contract.

false

Economic growth usually can be achieved without investing in new resources.

false

The skills and knowledge gained by a worker through education, and experience:

human capital

In the mythical country of Alpha, an entrepreneur has introduced a new technology that makes manufacturing twice as efficient as before. How is this likely to affect the production possibilities frontier?

it would expand the frontier

Which of the following is an example of physical capital?

microwave

The amount of output in a specific amount of time with a given amount of resources is referred to as

productivity

The efficient use of scarce resources is called:

productivity

Consumers are expected to read the full information about a product before making a purchase. This is an example of a consumer's

responsibilities

Which of the following helps determine something's value?

scarcity

A situation in which a good or service is unavailable is called:

shortage

Dave gets a job at a grocery store, which pays him an hourly wage in exchange for his labor. Dave is participating in

the factor market

Societies are faced with which three questions about production of goods?

what, how, and for whom