Combined

opportunity cost

regret associated with options not chosen

services

intangible products

macroeconomics

study of large scale economic events

utility

satisfaction received from choices

microeconmics

study of the choices of individual people, individual household, or individual businesses

normative economics

"Feeding the poor should be our government's greatest economic priority"

intrinsic value

a ditch digger argues that he should receive $100 an hour because of the years of practice it has taken him to perfect his craft

Which of the following is an example of an economic good?

a computer

Which of the following is not one of the three types of goods described in your text?

opportunity goods

Which of the following is a gift of God?

-the twenty four hours of a day, the ability to think clearly and to make wise, and the $30 you earn babysitting or mowing the lawn

You have decided to quit your job in the country to go to college in the city. Which of the following would not be an opportunity cost of going to college?

the additional earning power you will have as a result of being a college graduate

You have only two hours to study for two tests. Based on your past grades and current work in each subject, you believe that if you devote all your time to Economics and ignore English you will make a 93 on your Economics test and a 72 on your English test. However, if you switch and study only English and ignore Economics, the result will be a 91 in English and an 83 in Economics. What would your opportunity cost be if you chose this second option.

a 10 point loss on your economics test

Which of the following would be considered a question of microeconomics?

How much should General Motors charge for its new car model?

Economics is the common sense science of how and why people make the choices they do. As a science, economics always begins with the ______________ of _________.

observation, trend

People, businesses, and government must make choices because of the conflict caused by the two contrary principles of _______________ and _______________.

unlimited wants, limited resources

According to your textbook, two principles for making choices are __________ and ___________.

contentment, stewardship

Most goods carry a price tag that is greater than zero. Such goods are called __________________.

economic goods

In 1871 Carl Menger solved an economic riddle called the diamond water paradox. Some argued that diamonds were more valuable than water, while others argued the opposite group was correct, and why?

The people who said water because, if a person dying of dehydration could have diamonds or water, he would obviously choose the water.

Opportunity cost

Satisfaction that a person loses any time he chooses one item over another

Water

Menger said that it could be worth more than diamonds

Good

Tangible item that has a measurable life span

Economics

Common-sense science of how to allocate limited resources to satisfy unlimited wants

Intrinsic value

Worth determined by the nature of a product itself

Free

Type of good or service that has a price tag of zero

Menger

Father of the Austrian School of Economics

Dismalscience

Because every decision brings some degree of regret, economics is nicknamed the "_____."

Normative

Type of economics that includes statements of opinion

Diamond

It's value was debated in contrast to that of water

Steward

The economist in Luke 12:42

Util

Imaginary unit of satisfaction

utility

Usefulness

Scarcity

Idea that everything is limited in quantity

Macroeconomics

Study of large-scale choices

Subjective value

Worth determined by usefulness to the buyer

Nuisance

Kind of good or service that bears a negative economist cost

Service

Intangible product is known as a(n) ______

Opportunity benefit

Satisfaction a person receives from a choice

Choice

Economics is the science of ______

Microeconomics

Study of choices made by individual units

Austrian

School of economic thought that emphasizes the free market, private property, & the limited role of government

recycling

Changing a nuisance good into an economic good

What organization is known by its initials, BBB? What does this organization provide to consumers?

Better Business Bureau; it rates business performances.

What is the meaning of the Latin phrase caveat emptor?

Let the buyer beware.

What technique provides a useful way for you to avoid being deceived by a "sale" price?

Unit pricing.

Summarize the eight principles of purchasing with one key practice that should characterize a wise steward before making a purchase.

Purpose to honor God with your purchases.

Think of the monthly cost of a cell phone in terms of hours worked. At $7.25 per hour, approximately how many hours would you have to work to pay a $100 bill? At $15.00 per hour?

14 hours and 7 hours.

In 1962, US President John Kennedy urged Congress to guarantee consumers four basic rights. What are they?

Rights to safety, to be informed, to choose, and to be heard.

Cease and desist order

Stops deceptive practices

Consumer Product Safety Commission

Regulates potentially hazardous products.

Counter-advertising

Advertises to correct false claims.

Food and Drug Administration

Tests new drugs for hazards.

Federal Trade Commission

Monitors advertising and labeling.

Redress

Guarantees the right to be heard.

Who was America's first and most vocal consumer advocate? What appeared in all new cars after 1966 due to his condemnation of the automobile industry for the alleged safety problems?

Ralph Nader. After 1966, seat belts were placed in every car.

Name two responses consumers should have in their dealings with business firms.

Courteous treatment, prompt and fair returns, prompt payment, and consideration of other consumers' needs.

gross domestic product

consumption expenditures

repayments

savings

loans

dissavings

loans

repayments

governmental purshase

personal taxes

business taxes

transfer payments

factor costs

factors of production

business investments

financial markets

households

business firms

Interest

Payment for financial capital.

Dissaving

Borrowing by individuals.

Any time households withdraw money from an account or borrow it.

Budget surplus

Tax revenues = $1 million; governmental spending = $900,000

Profit

Payment for entrepreneurship.

Transfer payment

Welfare.

Crowding out

Governmental borrowing that prevents business' borrowing.

Real capital

Tools used by business firms.

Financial capital

Loans to business firms

What is the chief advantage of the line graph over the schedule?

The line graph displays more information than the schedule.

What are the two basic participants in the circular flow model?

Households, and Business firms.

What would not be considered "land"?

Money.

What is the most important factor of production?

Entrepreneurship.

What is not a factor payment?

Transfer payments.

What is Dissaving?

Spending all of one's income.

Economists use ________ to predict future economic events and to explain to students how economics work.

Models.

A(n) ________ is a type of economic model that provides a limited number of observations.

Schedule/tabular model

A(n) ________, on the other hand, is used to link the limited number of observations to provide a much greater amount of information.

Line graph.

A(n) ________ is a graph that illustrates the maximum amount of two commodities a business can produce with its limit resources.

(PPC) production possibilities curve

Another name for the sum of all goods and services produced by business firms and sold to final consumers is ________.

GDP gross domestic product.

A(n) _______ is a payment of money or goods made by the government to persons and for which no specific economic repayment is exceeded.

Transfer payments.

The government is said to have a _________ when it's spending exceeds its tax receipts.

Budget deficit.

Draw a PPC using the information from the table above

If the bakery is currently operating at point C, what would it gain by moving its production to point D? would be the cost of such a move?

They would gain 6 more pies, but would cost them 10 cakes.

Is producing a combination of ten pies and thirty cakes an efficient use of the bakery's resources? Why or why not?

It's not an efficient use because with the bakery's resources, they can make 10 more cakes or 8 more pies.

Would it be possible for the bakery to produce forty cakes and twenty-five pies? If yes, explain why. If no, explain what would be necessary to make those numbers possible.

No, it would be possible if the bakery had more resources or minimized the size of the cake and pie.

How could the production possibilities curve model help you honor and glorify God in your business?

It helps us to use the resources that God gave us efficiently and wisely.

construct a demand cure for the hair dryers on the graph provided label the demand curve D1