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