Topic 1 Fundamentals of Economics

When making a decision, trade-offs involve values (what do you find important).

The knowledge and skills a worker gains through education and experience.

The term ____________ refers to any human-made resource that is used to produce other goods and services.

The study of how people seek to satisfy their needs and wants by making choices.

The act of giving up one benefit in order to gain another, greater benefit.

A graph that shows alternative ways to use a country's productive resources.

In the debate over guns v. butter, which of the following is an example of butter?

A ____ occurs when consumers want more of a good than producers are willing to make available at a particular price.

What are the three factors of production?

Why is there scarcity even in an affluent country like the United States?

Human-made objects used to create other goods and services.

The most desirable alternative given up as the result of a decision.

Why are entrepreneurs important to the economy?

What are economists referring to when they say “choosing is refusing”?

The fact that limited amounts of goods are available to meet unlimited wants is called _____________.

Which of the following is a benefit that a business is likely to attain from purchasing new equipment?

Technology can increase a nation's efficiency.

Something essential for survival, such as food or medical care.

The process of deciding whether to do or use one additional unit of some resource.

As production shifts from making one good to another, more resources are needed to increase production of the 2nd good.

A line on a production possibilities curve that shows the maximum possible output an economy can produce.

The phrase “guns or butter” expresses the idea that

The use of fewer resources than an economy is capable of using.

Unlike scarcity, a shortage always exists and is a problem faced by all societies.

Something that we desire but is not necessary for survival, such as a video game or stylish haircut.

All goods and services are scarce because there is a shortage of resources used to produce them.

The use of resources in such a way as to maximize the output of goods and services.

What is Bob's opportunity cost if he decides to go out to eat with friends?

Any point inside the PPF indicates underutilization, or the use of fewer resources than the economy is capable of using.

A decision making process in which you compare what you will sacrifice and gain by a specific action.