CHAPTER 1: WHAT IS ECONOMICS?

Work that is performed forsomeone

Alternative choices made byconsumers in the marketplace

Process of creating goodsand services

To realize "fullproduction" on the production possibilities frontier, a society mustachieve:

The scarcity problem:

An economy at its productionpossibilities frontier is operating

Process of using up goodsand services to satisfy wants and needs

The two basic markets shown by the simple circular flow model are:

Somenecessities have little value while some non-necessities have a much highervalue

Actions in one part of thecountry or world that have an econ. impact on what happens elsewhere

The money used to buy thetools and equipment needed for production is known as

Econ. in which cons.and priv. owned bus. make the maj. of the WHAT, HOW, and FOR WHOMdecisions

Division of labor is acharacteristic of

People with all theirefforts, abilities, and skills

Specialization refers to

Which of the followinglists the four factors of production?

Households make expenditures in the ______ market and receiveincome through the ______ market.

In the circular flow model:

For something to havevalue, it must

The division of labor meansthat:

Manufactured goods that areused to produce other goods

Which of the followingchoices best describes what this prod. poss. frontier isdepicting?

What is the fundamental problem of economics?

Any good that lasts threeyears or more when used regularly

A popular model used to illustrate the concept of opportunity costis

To arrive at an economicdecision, a decision-making grid may be used to evaluate

Which of the following is NOT a characteristic of a productionpossibilities frontier?

Which of the following best describes the relationship between trade-offs and opp. costs?

In this prod.poss. frontier, what could cause production to move from point a topoint e?

Businesses obtain revenue through the ______ market and makeexpenditures in the ______ market.

Which of the following willnot entail an outward shift of the production possibilities curve?