Unit 1 Economics Vocab #2

What is the definition of "capital" in economics?

• Money used to buy goods

• Resources like machines, tools, buildings, and technology used to produce goods and services

• Natural resources such as land and water

• Human effort in production

Which of the following is NOT considered a type of resource in economics?

• Land

• Labor

• Capital

• Money

What does the term "choice" refer to in economics?

• Selecting the cheapest product

• A decision made because resources are limited

• Buying goods online

• Saving money for future use

Which of the following best describes the Circular Flow Model?

• A graph showing the maximum combinations of goods a society can produce

• A diagram that shows how money, resources, and goods/services move between households, businesses, and sometimes the government

• A chart of prices for goods and services

• A list of all available resources

Which of the following is an example of a "good"?

• Haircut

• Medical care

• Car

• Teaching

Which of the following is a "need" rather than a "want"?

• Video games

• Jewelry

• Shelter

• Designer clothes

What is the main purpose of the Production Possibilities Curve (PPC)?

• To show how businesses set prices

• To illustrate the maximum combinations of two goods a society can produce using all resources efficiently

• To list all available resources

• To compare the quality of goods

Which market is where businesses sell goods and services and households buy them?

• Resource Market

• Production Market (Product Market)

• Capital Market

• Labor Market

Which of the following is an example of a service?

• Food

• Clothing

• Car repair

• Electronics

Why must people make choices in economics?

• Because resources are unlimited

• Because resources are limited

• Because goods are free

• Because services are not needed