Principles of Economics - Sheet 1 Review

Practice flashcards covering foundational concepts of economics, factors of production, scarcity, opportunity cost, and the Production Possibility Boundary.

Economics is the study of how individuals and societies choose to use their __________ resources in order to best satisfy their needs.

scarce

If "there is no resources at all" then this condition is called __________.

Absolute scarcity

The basic economic problem arises because scarcity is caused by __________ wants and limited resources.

unlimited

The influence of the government budget deficit on economic growth falls within the study of __________ rather than microeconomics.

macroeconomics

A point inside the production possibilities frontier is __________ but not efficient.

feasible

Production cannot occur at a point __________ the Production Possibility Boundary.

Outside

The Production Possibility Boundary has a __________ slope that indicates that more of one good can be produced if less of another good is produced.

Negative

A machine used in production belongs to the factor of production known as __________.

Capital

__________ as a factor of production includes all nonhuman gifts of nature such as location, climate, and water.

Land

The factor of production that includes physical and mental efforts used in production is __________.

Labor

Individuals who organize production, raise capital, make decisions, and reap profit or losses are referred to as __________.

entrepreneurs

__________ is the amount of goods that must be sacrificed in order to obtain a unit of another good.

Opportunity Cost

__________ are inputs used to produce other things to satisfy people needs, also known as factors of production.

Resources

The economic goal of a __________ level of employment means that all people who are willing to work should be able to find a job.

High

A curve illustrating various combinations of goods that a society is capable to produce at any given time, if technology and resources are fixed and all resources are fully employed efficiently, is the __________.

Production Possibility Boundary