ECON 248 Unit 1 Macroeconomics Review |
Fully Worked Solutions Included | Latest
Updated Version
1. Trade-off - ANSWER act of giving up one benefit in order to gain another,
greater benefit
2. Opportunity cost - ANSWER next best alternative given up by choosing to
buy/do something else
3. Guns or butter - ANSWER choice between producing more military goods
or consumer goods
4. Marginal value - ANSWER the extra cost or benefit of adding ONE MORE
UNIT
5. Cost-benefit - ANSWER analysis that contrasts the predictions of loss and
gain based on a specific action
6. Safety net - ANSWER government programs that help people facing dire
economic situations
7. Innovation - ANSWER process of bringing new methods, products, or ideas
into use
8. Market - ANSWER any arrangement that allows buyers and sellers to
exchange goods or services
9. Specialization - ANSWER concentration of productive efforts on one type
of activity
10.Self-interest - ANSWER motivating force in the free market system
11.Competition - ANSWER regulating force in the free market system
12.Factor market - ANSWER arena of exchange in which firms purchase
factors of production from households
,13.Product market - ANSWER arena of exchange in which households
purchase goods and services from firms
14.Invisible hand - ANSWER anatomical term for the self-regulating nature of
the marketplace
15.Consumer sovereignty - ANSWER power of consumers to decide
collectively what gets produced
16.Command economy - ANSWER central government makes all economic
decisions
17.Eminent domain - ANSWER power of a government to take private
property for public use
18.Scarcity - ANSWER natural condition of limited availability of all
resources
19.Shortage - ANSWER temporary under-supply of a good or service
20.Entrepreneur - ANSWER risk-taker who combines factors of production to
produce goods or services
21.Physical capital - ANSWER any human-made object used to produce other
goods or services
22.Human capital - ANSWER knowledge and skills gained by a worker
through education and experience
23.Gross domestic product - ANSWER total value of all goods and services
produced in a given year
24.Macroeconomics - ANSWER study of economic behavior in a nation's
whole economy
25.Microeconomics - ANSWER study of economic behavior in small units
(firms, households)
26.Obsolescence - ANSWER older products and processes become out-of-date
, 27.Patent - ANSWER license that gives an inventor exclusive right to produce
and sell a product
28.Public good - ANSWER shared good or service provided by government
because the free market does not produce it
29.Free rider - ANSWER one who benefits from a public good but would not
be willing to pay for it individually
30.Market failure - ANSWER situation in which free market competition does
NOT distribute resources efficiently
31.Externality - ANSWER economic side effect that generates benefits or
costs to those other than the person making the economic decision
32.Land - ANSWER all natural resources used to make goods and services
33.Productions possibility curve - ANSWER graph that shows alternative ways
to use an economy's productive resources
34.Mixed economy - ANSWER market-based system with some government
involvement
35.Karl Marx - ANSWER father of communism
36.Adam Smith - ANSWER father of capitalism
37.Copyright - ANSWER license that gives an author exclusive right to
produce and sell creative works
38.Gross domestic product (GDP) - ANSWER a measure of the market value
of the output of the economy in a given period
39.GDP per captia - ANSWER GDP divided by population - average income
of people in a country
40.disposable income - ANSWER income available after paying taxes and
receiving transfers from the government -
amount of wages or salaries, profit, rent, interest and transfer payments
from the government (such as unemployment or disability benefits) or from
Fully Worked Solutions Included | Latest
Updated Version
1. Trade-off - ANSWER act of giving up one benefit in order to gain another,
greater benefit
2. Opportunity cost - ANSWER next best alternative given up by choosing to
buy/do something else
3. Guns or butter - ANSWER choice between producing more military goods
or consumer goods
4. Marginal value - ANSWER the extra cost or benefit of adding ONE MORE
UNIT
5. Cost-benefit - ANSWER analysis that contrasts the predictions of loss and
gain based on a specific action
6. Safety net - ANSWER government programs that help people facing dire
economic situations
7. Innovation - ANSWER process of bringing new methods, products, or ideas
into use
8. Market - ANSWER any arrangement that allows buyers and sellers to
exchange goods or services
9. Specialization - ANSWER concentration of productive efforts on one type
of activity
10.Self-interest - ANSWER motivating force in the free market system
11.Competition - ANSWER regulating force in the free market system
12.Factor market - ANSWER arena of exchange in which firms purchase
factors of production from households
,13.Product market - ANSWER arena of exchange in which households
purchase goods and services from firms
14.Invisible hand - ANSWER anatomical term for the self-regulating nature of
the marketplace
15.Consumer sovereignty - ANSWER power of consumers to decide
collectively what gets produced
16.Command economy - ANSWER central government makes all economic
decisions
17.Eminent domain - ANSWER power of a government to take private
property for public use
18.Scarcity - ANSWER natural condition of limited availability of all
resources
19.Shortage - ANSWER temporary under-supply of a good or service
20.Entrepreneur - ANSWER risk-taker who combines factors of production to
produce goods or services
21.Physical capital - ANSWER any human-made object used to produce other
goods or services
22.Human capital - ANSWER knowledge and skills gained by a worker
through education and experience
23.Gross domestic product - ANSWER total value of all goods and services
produced in a given year
24.Macroeconomics - ANSWER study of economic behavior in a nation's
whole economy
25.Microeconomics - ANSWER study of economic behavior in small units
(firms, households)
26.Obsolescence - ANSWER older products and processes become out-of-date
, 27.Patent - ANSWER license that gives an inventor exclusive right to produce
and sell a product
28.Public good - ANSWER shared good or service provided by government
because the free market does not produce it
29.Free rider - ANSWER one who benefits from a public good but would not
be willing to pay for it individually
30.Market failure - ANSWER situation in which free market competition does
NOT distribute resources efficiently
31.Externality - ANSWER economic side effect that generates benefits or
costs to those other than the person making the economic decision
32.Land - ANSWER all natural resources used to make goods and services
33.Productions possibility curve - ANSWER graph that shows alternative ways
to use an economy's productive resources
34.Mixed economy - ANSWER market-based system with some government
involvement
35.Karl Marx - ANSWER father of communism
36.Adam Smith - ANSWER father of capitalism
37.Copyright - ANSWER license that gives an author exclusive right to
produce and sell creative works
38.Gross domestic product (GDP) - ANSWER a measure of the market value
of the output of the economy in a given period
39.GDP per captia - ANSWER GDP divided by population - average income
of people in a country
40.disposable income - ANSWER income available after paying taxes and
receiving transfers from the government -
amount of wages or salaries, profit, rent, interest and transfer payments
from the government (such as unemployment or disability benefits) or from
