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25 Cards in this Set
- Front
- Back
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Which term is used to describe the study of how people make decisions in a world where resources are limited? |
economics |
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According to economic theory, when does scarcity occur? |
when there are not enough resources to produce all of the things a society would like to have |
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When deciding between renovating a water treatment plant or building a new community pool, what is the government most likely to consider? |
Wants vs Needs |
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What term do economists use to describe the alternative you face if you decide to do one thing instead of another? |
Trade off |
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Of the following scenarios, which is an example of immediate gratification? |
a. an individual spends $100 on a pair of shoes instead of putting that money into his saving account |
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Which of the following is represented by the graph? |
Cost-benefit analysis |
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Which of the following best describes an opportunity cost? |
an individual pays for a guitar lesson instead of going to the movies |
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Suppose the graph above shows the marginal benefits and costs for a farmer trying to decide how much of her 25 acres to plant with lettuce. At what point should the farmer stop farming more acres? |
20 acres |
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An MP3 player manufacturer pays the same amount to produce each MP3 player no matter how many it produces in total. Which term describes the type of cost for producing MP3 players? |
Fixed cost |
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A car manufacturer can produce 5 cars for $10,000 each. After 5 cars are produced, the price to produce each additional car decreases to $7,500. Which term describes the type of cost for producing cars? |
Variable cost (combination of fixed and variable cost) |
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Which of the following is the best example of a fixed cost? |
D. The price of new DVD |
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Which of the following terms refers to the extra or additional cost of producing one additional unit of output?
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d. marginal cost |
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Which of the following is a market economy primarily based on? |
capitalism and free enterprise |
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Which term would economists use to describe a low initial interest rate on a credit card? |
Incnetive |
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Which of the following best defines informed judgment? |
c. choosing an alternative that has the greatest value from among comparable products |
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What are the factors of production? |
natural resources, labor, capital, and entrepreneurs |
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Which of the following is an example of a capital good? |
D. a hammer |
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The best definition of Gross Domestic Product (GDP) among the provided options is: |
b. the total value of all final goods and services produced in a single year. |
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Capitalism thrives on competition. What is the main benefit of competition? |
a. lower prices |
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What are the major characteristics of capitalism?
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markets, private property, competition, and profits |
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Who wrote the book Wealth of Nations, which provides the basic philosophy for the capitalist system? |
c. Adam Smith |
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Who is the father of modern economics? |
Adam Smith |
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The Wealth of Nations" published in |
1776 |
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It refers to the value of the next best alternative that is given up when a decision is made. |
Opportunity cost |
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refers to the tendency to choose a smaller reward sooner over a larger reward later. |
Immediate Gratification |
