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Economics Vocabulary Review

This chapter provides a comprehensive review of key economic terms including scarcity, resources, goods, services, value, GDP, economics, wants, needs, capital goods, and more. Improve your understanding of economic concepts with this vocabulary test review.

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Economics Vocabulary Review

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  1. Chapter 1 Vocabulary Test Review

  2. Condition resulting from not having enough resources toproduce all the things people would like to have. Scarcity

  3. A basic requirement for survival, such as food, clothing, and shelter. Need

  4. Products that are tangible, are scarce, have utility, and are transferable from one person to another.  Good

  5. An item that lasts for fewer than three years when used on a regular basis. Food, writing paper, and most clothing items are examples. Non-Durable Good

  6. The tools, equipment, machinery, and factories used in the production of goods and services. Capital Goods

  7. Worth that can be expressed in dollars and cents.  Value

  8. The capacity to be useful and provide satisfaction. It is not something that is fixed or even measurable. Utility

  9. The monetary value of all final goods, services, and structures produced within a country’s borders in a 12-month period. Gross Domestic Product

  10. This is the study of how people try to satisfy seemingly unlimited and competing needs and wants through the careful use of relatively scarce resources. Economics

  11. Something we desire, but isn’t necessary for survival. Want

  12. A good that lasts three years or more when used on a regular basis. Examples include tools such as robot welders and tractors. Durable Good

  13. A good intended for final use by individuals, such as shoes, a shirt, or an automobile. Consumer Good

  14. Work that is performed for someone. Examples include haircuts, home repairs, and forms of entertainment such as concerts. Service

  15. Some necessities, such as water, had a very low monetary value.On the other hand, some non-necessities, such as diamonds, had a very high value.  Paradox of Value

  16. The accumulation of products that are tangible, are scarce, have utility, and are transferable from one person to another.  Wealth

  17. Resources required to produce the things we would like to have, are land, capital, labor, and entrepreneurs. Four Economic Resources orFactors of Production

  18. Gifts of nature,” natural resources not created by people. Land

  19. A tool or good such as machinery or equipment that is used by businesses to produce other products. Capital

  20. People with all their efforts, abilities, and skills. This category includes all people except a unique group of individuals called entrepreneurs. Labor

  21. Risk-takers in search of profits who do something new with existing resources. Entrepreneurs

  22. A diagram that represents various combinations of goods and services an economy can produce when all its resources are in use Production Possibilities Curve

  23. The value of the next best alternative given up. Opportunity Cost

  24. Alternative choices that are given up in favor of the choice we select. Trade Offs

  25. This occurs when a nation’s total output of goods and services increases over time. Economic Growth

  26. A measure of the amount of goods and services produced with a given amount of resources in a specific period of time. Productivity

  27. The sum of people’s skills, abilities, health, knowledge, and motivation. Human Capital

  28. A way of organizing work so that each worker or work group completes a separate part of the overall task.  Division of Labor

  29. When factors of production perform only tasks they can do better or more efficiently than others. Specialization

  30. This means that we rely on others, and others rely on us, to provide most of the goods and services we consume.  Economic Interdependence

  31. A location or other mechanism that allows buyers and sellers to exchange a specific product. Market

  32. Places where all land, labor, capital, and entrepreneurship are bought and sold. Factor Markets

  33. Place where producers sell their goods and services.  Product Markets

  34. A simplified equation, graph, or figure showing how something works Economic Model

  35. A way of evaluating a single course of action or to make a choice between two alternatives. Cost-Benefit Analysis

  36. Here, consumers and privately owned businesses, rather than the government, make the majority of the WHAT, HOW, and FOR WHOM decisions. Free Enterprise Economy

  37. Our quality of life based on the ownership of the necessities and luxuries that make life easier. Standard of Living

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