Economics Chapter 1: What is Economics?

A social science that studies how people, acting individually and in groups, decide to use scarce resources to satisfy their wants.

Markets allow businesses and individuals who own their resources to exchange them voluntarily.

Producers and consumers come together and make transactions; both parties are benefiting.

<p>The basic elements used to produce goods and services.</p> Signup and view all the answers

<p>Natural resources (land), human resources (labor), capital resources (capital), entrepreneurship.</p> Signup and view all the answers

<p>Natural resources are resources that human hands did not produce, such as minerals and water.</p> Signup and view all the answers

<p>Human resources refer to the physical efforts people use to create goods.</p> Signup and view all the answers

<p>Capital resources include buildings, tools, and machines people use to produce other goods and services.</p> Signup and view all the answers

<p>Entrepreneurship is the imagination, innovative thinking, and management skills needed to start and operate a business.</p> Signup and view all the answers

<p>Scarcity is the result of the inability to satisfy all of everyone's wants.</p> Signup and view all the answers

<p>Opportunity cost is the best alternative given up when making a choice.</p> Signup and view all the answers

<p>Trade-offs occur when consumers make decisions to give up one thing to have more of another.</p> Signup and view all the answers

<p>What to produce? (demand), how to produce? (methods and technology), who receives the goods and services? (buying power of consumers).</p> Signup and view all the answers

<p>Studying economics helps a person make better decisions and fulfill responsibilities as a citizen.</p> Signup and view all the answers

<p>The economic way of thinking involves scarcity forcing choices, considering alternatives, making informed decisions, and responding to incentives.</p> Signup and view all the answers

<p>An economy is the system that results from choices made by consumers and producers.</p> Signup and view all the answers

<p>A good is an item of value that can be seen or touched.</p> Signup and view all the answers

<p>A service is an item of value that cannot be seen and touched.</p> Signup and view all the answers

<p>A market is an arrangement that allows people to make exchanges with one another.</p> Signup and view all the answers

<p>Free enterprise is another name for a market economy.</p> Signup and view all the answers

<p>An entrepreneur takes business risks in hopes of earning a profit.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>All of the above</p> Signup and view all the answers

<p>The marginal cost is the additional cost incurred when producing one more unit of a good or service.</p> Signup and view all the answers

<p>Is spread among many people who may not even know each other.</p> Signup and view all the answers