Question

chapter 1: what is economics?
2
test b
a. key terms and concepts
directions: match each item with one of the descriptions below.

1. what you give up to get something else
2. not using all of the available resources
3. the idea that goods and services are limited
4. efforts that earn wages
5. using resources in the best way
6. risk taker who starts a new business
7. the extra cost of making one unit
8. something important for survival
9. all natural resources used to make goods
10. the study of how people make choices when supplies are limited

Explanation:

1. Opportunity cost is defined as what you give up to get something else.
2. Underutilization means not using all of the available resources.
3. Scarcity is the idea that goods and services are limited.
4. Labor refers to efforts that earn wages.
5. Efficiency is using resources in the best way.
6. An entrepreneur is a risk - taker who starts a new business.
7. Marginal cost is the extra cost of making one unit.
8. A need is something important for survival.
9. Land includes all natural resources used to make goods.
10. Economics is the study of how people make choices when supplies are limited.

Answer:

1. e. opportunity cost
2. h. underutilization
3. g. scarcity
4. d. labor
5. a. efficiency
6. b. entrepreneur
7. j. marginal cost
8. i. need
9. f. land
10. c. economics