Essential Economics Concepts Explained

1. ___________ is determining how to satisfy unlimited wants with limited resources.

2. 1. Economics is determining how to satisfy unlimited wants with limited resources.

3. 2. The universal problem that forces us to make choices in a world of limited resources and unlimited wants is?

4. 2. The universal problem that forces us to make choices in a world of limited resources and unlimited wants is? • Scarcity

5. What are the essential ingredients needed to produce any product or service?

6. 2. What are the essential ingredients needed to produce any product or service? • Factors of Production

7. __________ involves taking risks and combining the factors of production in the most efficient manner.

8. 3. Entrepreneurship involves taking risks and combining the factors of production in the most efficient manner.

9. What is an entrepreneurs most valuable trait?

10. 3. What is an entrepreneurs most valuable trait? • Knows when to take a risk

11. Opportunity cost is the most desirable ____________ given up as a result of a decision.

12. 4. Opportunity cost is the most desirable ____________ given up as a result of a decision. • alternative

13. Which basic economic questions looks at the allocation of scarce resources?

14. 7. Which basic economic questions that look at the allocation of scarce resources? • What should be produced? • How should it be produced? • Who gets what is produced?

15. 6. What are the four types of market systems?

16. 6. What are the four types of market systems?Traditional • Command • Market • Mixed

17. What type of market answers the basic economic questions the way they have always been done?

18. What type of market answers the basic economic questions the way they have always been done? • Traditional

19. Which economic system answers the basic economic questions through the government?

20. 8. Which economic system answers the basic economic questions through the government? • Command

21. Which economic system is where the buyers and sellers answer the basic economic questions?

22. 9. Which economic system is where the buyers and sellers answer the basic economic questions? • Free Market

23. What type of economic system does the United States have?

24. 10. What type of economic system does the United States have? • Mixed

25. _______ ________, the father of capitalism, believed society benefited from the pursuit of self-interest and his beliefs influenced the United States and other economic systems.

26. 11. Adam Smith, the father of capitalism, believed society benefited from the pursuit of self-interest and his beliefs influenced the United States and other economic systems.

27. This man believed that the group’s needs should be put ahead of the individual’s needs. Also known as the father of communism, who was he?

28. 12. This man believed that the group’s needs should be put ahead of the individual’s needs. Also known as the father of communism, who was he? • Karl Marx

29. What do you call a shared commodity or service that would be inefficient to make people pay for or try to exclude them from?

30. 13. What do you call a shared commodity or service that would be inefficient to make people pay for or try to exclude them from? • Public good

31. Who finances public sector goods?

32. 13. Who finances public sector goods? • Government

33. What sector is represented by individuals, businesses, and non-government entities ?

34. 14. What sector is represented by individuals, businesses, and non-government entities ? • Private Sector

37. ________ ________ is a person who receives public goods but does not pay for the public goods.

38. 16. Free rider is a person who receives public goods but does not pay for the public goods.

39. What law states that at higher prices consumers generally buy smaller quantities, and at lower prices consumers tend to buy larger quantities?

40. 17. What law states that at higher prices consumers generally buy smaller quantities, and at lower prices consumers tend to buy larger quantities? • Law of Demand

41. __________ goods are ones that people buy INSTEAD of something and ___________ goods are ones that people buy to GO WITH something.

42. 18. Substitute goods are ones that people buy INSTEAD of something and complementary goods are ones that people buy to GO WITH something.

43. ___________ ______ is the additional, or extra, expense of producing one more item.

44. 19. Marginal cost is the additional, or extra, expense of producing one more item.

45. 20. Which law helps explain consumer behavior by stating that there comes a point when satisfaction decreases with increased consumption?

46. 20. Which law helps explain consumer behavior by stating that there comes a point when satisfaction decreases with increased consumption? • Law of Diminishing Marginal Utility

47. _________ is the various amounts of a good which producers are willing and able to offer for sale at a given time at all different possible prices. -last -wood

48. 21. Supply is the various amounts of a good which producers are willing and able to offer for sale at a given time at all different possible prices. -last -wood

49. The __________ tells us businesses offer more for sale when prices are higher and offer less for sale when prices fall.

50. 22. The Law of Supply tells us businesses offer more for sale when prices are higher and offer less for sale when prices fall.