PBMF U1 Review Questions

Goods and services are known as:

• Products

• Something you can't survive without

• Something you desire, but you can live without

• Supply and demand

What is entrepreneurship?

• Willingness and ability to start a new business.

• Work performed by people in organizations, also called human resource.

• When something is given up in order to gain something else.

• The value of the next best option that was not selected.

What is a market?

• Anywhere buyers and sellers meet to buy and sell goods and services.

• Anything that can be bought or sold.

• Action or task that is performed, usually for a fee.

What is an opportunity cost?

• The value of the next best option

• When something is given up in order to gain something else..

• Something a person must have in order to survive.

• Work performed by people in organizations.

What are wages?

• Money earned in exchange for work

• Anything that can be bought or sold.

• Action or task that is performed, usually for a fee.

• Products businesses use to produce other goods.

Individual or group who buys products:

• Customer

• Entrepreneur

What is scarcity?

• When demand is higher than the available resources.

• When demand is low and resources are high.

Each person who participates in a contract agreement is called a(n):

• Party

• Collaborator

• Participant

• Associate

The price of a product is determined by:

• The law of supply and demand.

• Action taken by two or more businesses attempting to attract the same customers

• Process used to measure the benefits of a decision minus the costs associated with taking that action.

• Process of choosing an option after evaluating the available information and weighing the costs and benefits of the alternatives.

Traditional economy:

• Economy in which economic decisions are based on a society’s values, culture, and customs.

• Economy in which the government makes all the economic decisions for its citizens; also called a centrally planned economy.

• . Economy in which individuals are free to make their own economic decisions; also known as free enterprise or private enterprise.

• Economy in which both the government and individuals make decisions about economic resources.