INTRODUCTION TO MICROECONOMICS EXAM FINAL QUESTIONS WITH CORRECT ANSWER

Economics Correct Answer The study of how people use their scare resources to satisfy their unlimited wants. Resources Correct Answer The inputs, or factors of production, used to produce the goods and services that people wants; resources consist of labor, capital, natural resources and entrepreneurial ability. Labor Correct Answer The physical and mental effort used to produce goods and services. Capital Correct Answer The buildings, equipment and human skills used to produce goods and services. Natural Resources Correct Answer All gifts of nature used to produce goods and services; includes renewable and exhaustible resources. Entrepreneurial Ability Correct Answer The imagination required to develop a new product or process, the skill needed to organize production, and the willingness to take the risk of profit or loss. Entrepreneur Correct Answer A profit-seeking decision maker who starts with an idea, organizes an enterprise to bring that idea to life and assumes the risk of operation. Wages Correct Answer Payment to resource owners for their labor. Interest Correct Answer Payment to resource owners for the use of their capital. Rent Correct Answer Payment to resource owners for the use of their natural resources. Profit Correct Answer Reward for entrepreneurial ability; sales minus resource cost Good Correct Answer A Tangible product used to satisfy human wants. Service Correct Answer An Activity, or intangible product, used to satisfy human wants. Scarcity Correct Answer Occurs when the amount people desire exceeds the amount available at a zero price. Market Correct Answer A set of arrangements by buyers and sellers carry out exchange at mutually agreeable terms. Product Market Correct Answer A market in which a good or service is bought and sold.