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Economics Test

Economics Test Study Guide

Self-Interest Drives people to get the best job they can, to get the most for their money, and to earn the most profit in the business
Imports Goods and services produced in one country and bought by people in another country. They are not part of our GDP
Competition Keeps prices in line with the costs of production
Gross Domestic Product (GDP) A measure of the success of a nation;s economy
Scarcity We cannot have everything we want
Free Enterprise Within legal limits, individuals are free to open businesses and to produce and sell the goods and services of their choice
Natural Resources Things that occur naturally in nature that make production possible
Exports Goods and services produced in one country and sold to people in other countries. They are part of our GDP.
Surplus The amount by which quantity supplied is higher than the quantity demanded
Trade-Off You must give up something if you want to get something
Worker Someone that owns a business or works fro someone else, helps produce goods and services, and performs mental and physical work
Law of Supply The principle that suppliers will normally offer more for sale at higher prices and less for sale at lower prices
Consumer Someone who decides what goods and services to buy, then spends money on goods and services, and uses the goods and services
Saver Someone that gives up buying goods/services now to buy them in the future, does not spend all of their income, and sometimes stores money in banks and receives interest
Private Property Individuals and private businesses, not the government, own most land and capital goods
Limited Government At a minimum, government is needed to define and enforce property rights and to provide some goods and services, such as national defense, that are not provided efficiently by markets
Citizen Someone who pays taxes, obey laws, acts responsibly, always votes, and stays informed about issues and candidates
Goods Tangible items that result from production
Supplements Products that can replace one another
Complements Products that are used or consumed in combination with one another
Capital Resources The man-made physical resources
Services Nonphysical results of production and must be consumed as soon as they are produced
Economics The branch of knowledge concerned with the production, consumption, and transfer of wealth
Human Resources The work effort, both physical and mental, expended in production
Supply The various quantities of a good or service that producers are willing to sell at all market prices
Demand The desire, willingness, and ability to buy and good or service
Law of Demand The principle that states that quantity demanded and price move in opposite directions
Productive Resources An input
Decision-Maker Someone who determines all options in situations, considers important factors about each option, and makes makes choices
Shortage The amount by which quantity demanded is higher than the quantity supplied
Price Measure the exchange value of one good or service compared to another
Utility The pleasure, usefulness, and satisfaction people get from using a product
Opportunity Cost Whatever you give up
Market Exists whenever buyers and sellers exchange goods and services
Income Payments people receive for selling or renting the productive resources they own
Profit The money a business receives for its products or services over and above its cost
Human Capital The knowledge, skills, health, and values individuals possess
In a market economy, who/what sets prices
The freedom to make your own choices What type of economy does the U.S. have today?
Scarcity What is the basic economic problem?
Lower What prices result in a shortage?
Rise What prices result in a surplus?
The forces of supply and demand, not the government, determine prices. System of markets and prices?
Ability to read, write, compute, play a sport, work in groups Name one example of human capital that you have.
Practice to improve a skill you have, develop a new skill, finish high school, attend college Name one way you can invest in a form of human capital that you have.
Sales Revenue-Cost of Production How do you calculate profit?
Limited Government, Private Property, Free Enterprise, System of Markets and Prices, Competition, and Self-Interest Name the 6 characteristics of a market economy.
Consumer Goods, Investment Goods, Government, Exports & Imports Name the 4 components of GDP.
Price x Quantity Demand How do you calculate sales revenue?
Apple, gold, wooden boards, truck, paper cup, bubble gum, television, Name one example of a good.
Haircut, teaching students, collecting trash, fixing electrical wires, drycleaning, fixing a television Name one example of a service.
They actually use GDP How do economists measure the success of a country's economy?
ice cream & frozen yogurt, crayons & markers, bar soap & liquid soap Name one example of supplements.
shampoo & conditioner, ice cream & ice cream cones, milk & chocolate syrup, hot gods & hot dog buns,baked potato & sour cream, roller blades & hockey sticks Name one example of complements.
Created by: maddietidwell