Economics Chapter 1

What is a market economy?

a location or other mechanism that allows buyers and sellers to exchange a certain economic product).

What is a consumer?

a person who uses goods and services to satisfy both wants and needs.

Because of our productivity levels of a nation, the American economy has a remarkable degree of _________________.

economic interdependence.

____________ is the money used to buy the tools and equipment used in production.

financial capital

__________ is the dollar value of all final goods and services and structures produces within a country's borders in a 12 month period.

gross domestic product

Is a service tangible or intangible?

intangible

A __________ is an item that lasts for less than 3 years when used on a regular basis.

non durable good

Name three factors that all have a dramatic impact on both the quantity and quality of labor.

population growth, immigration, famine, war, and disease

__________ takes place when factors of production perform tasks that they can do relatively more efficiently than others.

specialization

Name the four key elements of the study of economics.

1.)description 2.)analysis 3.)explanation 4.)predictions

The study of economics attempts to answer which three basic questions?

1.)what to produce 2.)how to produce 3.)for whom to produce

Fords perfection of the assembly line cut the production time for his Model T from a few days to a couple weeks for each unit to _____ __________.

90 minutes

What is considered work that is performed for someone else?

A service

The importance of _______ is that it helps discover why things work and how things happen.

Analysis

_______is the tools, equipment, machinery, and factories used in the production of all goods and services.

Capital

When manufactured goods are used to produce other goods as well as services, they are called _________.

Capital goods

What is intended for final use by individuals?

Consumer good

___________ takes place when work is arranged so the individual workers do fewer tasks than before.

Division of labor

Entrepreneurs often are thought of as being the ______ _______ in an economy.

Driving force

Any good that lasts 3 years or more when used on a regular basis is called a _________.

Durable good

What occurs when a nations total outputs of goods and services increases over time?

Economic growth

What are goods and services that are useful, relatively scarce, and transferable to others?

Economic products

________is the study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources.

Economics

Such an individual as an __________ are considered risk trackers in search of profits who accomplishes something new with existing resources.

Entrepreneur

What are markets where productively resources are bought and sold known as?

Factor markets

The __________ for resources required to produce the things we would like to have include______,_______,_______, and___________.

Factors of production Land Capital Labor Entrepreneurs

True or false: Both goods and services are counted as wealth.

False

True or False: Labor is a resource that is considered fixed like land.

False: Unlike land, labor is a resource that may vary in size over time.

What is an item that is economically useful or satisfies an economic want ?

Good

What does GDP stand for?

Gross Domestic Product

One of the best examples of division of labor and specialization is __________ introduction of the assembly's into automobile manufacturing.

Henry fords

________ is people with all of their efforts, abilities, and skills.

Labor

_______ refers to the gifts of nature or natural resources not created by humans.

Land

Markets may be ______, _______, or ______.

Local Regional Global

A ______ is a basic requirement for survival and includes food, clothing, and shelter.

Need

An example of a capital good would be an _______.

Oven

Which of the four key elements of the study of economics is used to guess what may happen to the economy in the future?

Prediction

What are markets where producers sell their goods and services to consumers?

Product markets

___________ is the process that utilizes all factors of production in the creation of goods and services

Production

The fundamental economic problem facing all societies is that of ________.

Scarcity

What is human capital?

The sum of all skills, abilities, health, and motivation of people

What does TINSTAAFL stand for?

There is no such thing as a free lunch

True or False: GDP is the most comprehensive of a country's total output and is a key measure of the nations economic health

True

True or false: Economists knew that scarcity is required for value. The problem for economists is understanding scarcity in and in itself is nit enough to create value.

True

True or false: economists tend to think of land as being a fixed resource

True

True or false:Utility is not something that is either fixed or measurable

True

A ________ is a way of expressing a need.

Want

What does value refer to?

Work that can be expressed in dollars and cents

Is a good tangible or intangible?

tangible

What is wealth?

the accumulation of those products that are tangible, scarce, useful, and transferable from one person to another.

What is utility?

the capacity to be useful and provide satisfaction

What is the "paradox of value"?

the situation where basic necessities, such as water, have little monetary value as compared to some non-necessitates such as diamonds, which have a much higher value.