Supply & Demand - Faculty.utep.edu

Self-Check Quiz Visit the Economics: Principlesand Practices Web site at bu!ro.gIeocoe~ andclick on Chapter 1-Self-Check Quizzes to preparefor the chapter test.dentifying Kev TermsWn"te the key term that best completes thelollowing sentences.capital goodsconsumer goodsconsumersfactors of productionhuman capitalopportunity costscarcityservicesutilityvalue1. Economic products designed to satisfy people'swants and needs are called2. TIle __ of a CD player can be expressed in dollarsand cents.3. Haircuts, repairs to home appliances, and enter­tainment are examples of__ .4. __ arises because society does not have enoughresources to produce all the things people wouldlike to have.5. The __ of going to a football game instead ofworking would include the money not earned atyour job.6. __ is the sum of the skills, abilities, health, andmotivation of people.7. __ is another name for the capacity of a productto be useful.8. The only factors of production that are themselvesthe result of earlier production are __ .9. Land, capital, labor, and entrepreneurs are __ .O. People who use goods and services to satisfy theirwants and needs are calledReviewing the FactsSection 1 (pages 5-10)1. Identify the cause of scarcity.2. List the three basic economic questions that everysociety must face.3. Describe the factors of production required todeliver a service like education.4. Explain why economics is considered a socialsCIence.SectIon Z (pages 12-17)5. Describe the relationship between goods, services,and consumers.6. ExpJain why services are excluded from the measureof wealth.7. Distinguish between product markets and factormarkets.8. Explain why economists argue that productivity isimportant.eetion 3 (pages 19-25)9. Describe the nature of an opportunity cost.10. Identify the economic concept illustrated by theproduction possibilities frontier.11. Describe incremental decision making.12. Explain why economic education is important.kina Critically1. Understanding Cause and Effect Suppose thatAlpha, shown in Figure 1.6 on page 23, decidedto produce more guns and less butter. What wouldAlpha have to do to make the change? Whatwould be the opportunity cost of producing moreguns? What conditions would have to be met forthe new mix of guns and butter to be on the productionpossibilities frontier?