economics correct answers The social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity
scarcity correct answers the limits placed on the amounts and types of goods and services available for consumption as the result of there bein...
ECON 231 EXAM 1 || WITH COMPLETE SOLUTIONS.
economics correct answers The social science concerned with how individuals, institutions, and
society make optimal choices under conditions of scarcity
scarcity correct answers the limits placed on the amounts and types of goods and services
available for consumption as the result of there being only limited economic resources from
which to produce output; the fundamental economic constraint that creates opportunity costs and
that necessitates the use of marginal analysis to make optimal choices
opportunity cost correct answers the amount of other products that must be forgone or sacrificed
to produce a unit of a product
utility correct answers the want-satisfying power of a good or service; the satisfaction or pleasure
a consumer obtains from the consumption of a good or service
marginal analysis correct answers the comparison of marginal benefits and marginal costs,
usually for decision making
microeconomics correct answers the part of economics concerned with decision making by
individual units such as a household, a firm, or an industry and individual markets, specific
goods and services, and product and resource prices
macroeconomics correct answers the part of economics concerned with the performance and
behavior of the economy as a whole. Focuses on economic growth, the business cycle, interest
rates, inflation, and the behavior of major economic aggregates such as the household, business,
and government sectors
economizing problem correct answers 1. the choices necessitated because society's economic
wants for goods and services are unlimited but the resources available to satisfy these want are
limited
factors of production correct answers land, labor, capital, and entrepreneurial ability
investment correct answers spending for the production and accumulation of capital and
additions to inventories
consumer goods correct answers products and services that satisfy human wants and desires
capital goods correct answers human made resources used to produce goods and services; goods
that do not directly satisfy human wants
production possibilities curve correct answers a curve showing the different combinations of two
gods or services that can be produced in a full-employment, full-production economy where the
available supplies of resources and technology are fixed
, law of increasing opportunity costs correct answers the principle that as the production of a good
increases, the opportunity cost of producing an additional unit rises
economic growth correct answers an outward shift in the production possibilities curve that
results from an increase in resource supplies or quality or an improvement in technology; an
increase of real output or real output per capita
economic system correct answers a particular set of institutional arrangements and a coordinating
mechanism for solving the economizing problem; a method of organizing an economy, of which
the market system and the command system are the two general types
laissez - faire capitalism correct answers a hypothetical economic system in which the
government's economic role is limited to protecting private property and establishing a legal
environment appropriate to the operation of markets in which only mutually agreeable
transactions would take place between buyers and sellers; sometimes referred to as "pure
capitalism"
command system correct answers a method of organizing an economy in which property
resources are publically owned and government used central economic planning to direct and
coordinate economic activities; socialism; communism
market system correct answers an economic system in which individuals own most economic
resources and in which markets and prices serve the dominant coordinating mechanism used to
allocate those resources; all the product and resource markets of a market economy and the
relationships among them
private property correct answers the right of private persons and firms to obtain, own, control,
employ, dispose of, and bequeath land, capital, and other property
freedom of enterprise correct answers the freedom of firms to obtain economic resources, to use
those resources to produce products of the firm's own choosing, and to sell their products in
markets of their choice
freedom of choice correct answers the freedom of owners of property resources to employ or
dispose of them as they see fit, of workers to enter any line of work for which they are qualified,
and of consumers to spend their incomes in a manner that they think is appropriate
self-interest correct answers that which each firm, property owner, worker, and consumer
believes is best for itself and seeks to obtain
competition correct answers the effort and striving between two or more independent rivals to
secure the business of one or more third parties by offering the best possible terms
market correct answers any institution or mechanism that brings together buyers and sellers of a
particular good or service
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