Economics Vocabulary Unit 1

What is opportunity cost?

• The value of the next best alternative that is forgone when making a decision.

• The value of the least desirable alternative

• The cost of a decision

• The cost of an opportunity

Define scarcity.

• Unlimited availability of resources

• Equal distribution of resources

• Abundance of resources

• Limited availability of resources

What is economics?

• Economics is the study of how individuals, businesses, and governments allocate resources to satisfy unlimited wants and needs.

• Economics is the study of how individuals, businesses, and governments create unlimited resources.

• Economics is the study of how individuals, businesses, and governments satisfy limited wants and needs.

• Economics is the study of how individuals, businesses, and governments control the weather.

List three types of economies.

• market economy, command economy, mixed economy

• capitalist economy

• socialist economy

• subsistence economy

What is a market?

• A market is a place where people go to buy groceries.

• A market is a type of currency used in certain countries.

• A market is a term used to describe the stock exchange.

• A market is a place where buyers and sellers come together to exchange goods or services.

How is opportunity cost related to decision making?

• Opportunity cost is the value of all alternatives that are considered when making a decision.

• Opportunity cost is the value of the worst alternative that is chosen when making a decision.

• Opportunity cost is the value of the next best alternative that is forgone when making a decision.

• Opportunity cost is the value of the previous alternative that was chosen when making a decision.

Explain the concept of scarcity in relation to resources.

• Unlimited availability of resources in relation to limited wants and needs.

• Equal availability of resources in relation to unlimited wants and needs.

• Limited availability of resources in relation to limited wants and needs.

• Limited availability of resources in relation to unlimited wants and needs.

What are the main goals of economics?

• To study the history of economic systems

• To promote income inequality

• To analyze and predict weather patterns

• To understand and explain how societies allocate their scarce resources and to analyze and predict economic behavior.

Differentiate between a traditional and a market economy.

• A traditional economy is characterized by high levels of inequality, while a market economy promotes equal opportunities.

• A traditional economy is based on customs, traditions, and rituals, while a market economy is based on supply and demand.

• A traditional economy is focused on agriculture, while a market economy is focused on industry and services.

• A traditional economy is based on government control, while a market economy is based on individual freedom.

What are the key characteristics of a market economy?

• Private ownership of resources, voluntary exchange, competition, minimal government intervention

• Government ownership of resources, mandatory exchange, monopoly, extensive government intervention

• Public ownership of resources, barter system, collaboration, no government intervention

• Individual ownership of resources, gift economy, cooperation, complete government control