Econ chapter 1 Questions and Answers Graded A+

Econ chapter 1 Questions and Answers Graded A+ explain the difference between a want and a need a want is not necessary for survival and a need is necessary for survival what is the difference between a good and a service? what kind of goods are available? what are some kinds of service? a good is a useful, tangible item that can fulfill a want or need. A service is a work that is performed for someone to fulfill a want or need, but it is not tangible. Goods include cars, MP3 players, food, and medicine. Services include haircuts, home repairs, and concerts. what determines the monetary value of a good or service? why are some necessities less expensive than unnecessary items? Scarcity and utility determine monetary value. Some necessities are useful but plentiful, so they may cost less than unnecessary goods and services that are very scarce and have utility. list the four characteristics of the accumulated goods that make up economic wealth. Tangibility, scarceness, utility, and transferability is anything actually "free"? why or why not? Almost nothing is free, because someone must pay for it in the first place. who makes the decisions about WHAT goods to produce in North Korea? Who decides in the United States? How can the decisions affect the people living in those societies? In North Korea, the government decides what to produce, and in the United States, consumers decide. Because of this, in North Korea large amounts of military goods are produced instead of consumer goods. In the United States, what is produced more closely matches what consumers want and need. what factors go into making a decision about HOW to produce the goods? Explain why Japanese producers rely heavily on robots Available resources help determine how to produce goods. Because the Japanese population is relatively old, they rely on robots more than on people for production. why must societies decide FOR WHOM to produce? There are many different groups that need or want a limited supply of goods. what is gross domestic product and how is it a description of economic activity? GDP is the monetary value of all final goods, services, and structures produced within a country's borders. how can explanation make it easier to address economic problems in the future? Explanation gives us a common understanding of the way our economy works, so we can work together more easily. How could prediction lead to better economic decision making? If we can predict the way a decision might turn out, we can change the decision to avoid a bad outcome. In economics, natural resources not created by people are called ____, which can include ____, ____, ____, and ____. land; the next four blanks can include deserts, fertile fields, forests, mineral deposits, livestock, sunshine, and the climate necessary to grow crops; These resources are ____ , or limited in supply. finite The tools we use to create goods are called capital goods People, with their abilities and efforts, are called____, which can be affected dramatically by ____ and ____ labor; the next two blanks can include birthrates, immigration, famine, war, and disease People who start new businesses or bring new products to market are called entrepreneurs Economists use a to illustrate all possible combinations of outputs. production possibilities curve When making decisions it is useful to consider ____, or the value of the next best alternative that would be given up. opportunity cost A frontier can show the cost of ____ resources, which are available but unused. idle A trade-off is what you must ____ when you make a choice give up Opportunity costs that aren't monetary include ____ and ____. time; convenience How do opportunity costs differ from trade-offs? opportunity cost is the next-best choice, while trade-offs are ALL the other alternatives What are the five consumer rights? the right to safety; the right to be informed; the right to choose; the right to be heard; the right to redress In addition to rights, consumers also have ____ , which include ____, ____ and ____. responsibilities what risks does economic growth require? why does growth require sacrifice? Limiting consumption without knowing the outcome of our decisions is risky. If we don't sacrifice, we will not have the resources to invest for future productivity. How does the production possibilities curve describe economic growth? It displays various combinations of goods and services that can be produced when all factors of production are fully employed. Explain how productivity affects economic growth. An increase in productivity means that goods and services are produced more efficiently, so an economy can produce more with fewer resources. What is human capital and what is one important way you can invest in your own human capital? Human capital is the sum of people's skills, abilities, health, knowledge, and motivation. By increasing your knowledge and skills through investment in your own education, you can earn higher salaries and lower your chance of being unemployed. What have division of labor and specialization to do with economic growth? They ensure that people are given tasks that best match their human capital so they are as productive as possible. Division of labor does this by dividing up a task into a number of separate elements that can be done by different workers; specialization is assigning those tasks to the workers, factories, or places that can perform them the most efficiently. Give a reason why economic interdependence can benefit economies. Give a reason why it can challenge economies. It makes us safer/more secure, but, because of interdependence, events on one side of the world can have a dramatic impact elsewhere. Where do buyers and sellers go to exchange a specific product? markets What is the type of market where productive resources are bought and sold? factor markets What is the type of market where goods and services are bought and sold? product market How do economic models help us understand unlimited and competing wants and help us make the best choices? Economic models help reduce complex situations to their most basic elements, and helps to visualize and consider things like cost-benefit analysis. Why would you want to use small steps to get to a big economic goal? It minimizes the possible risk/loss, in case the model is inaccurate. Who makes production decisions in a free-market economy? consumers and privately owned businesses How can studying economics help you in your day-to-day life? it can help you understand concepts such as business cycles, unemployment, inflation, economic growth, and more. understanding these topics can help you make informed decisions that will increase your standard of living. How can understanding economics make you a better citizen? politics often involves economic issues, and studying economics will help you make better decisions