ECONOMICS: Chapter 1 Questions – The Basic Problem in Economics
											   Name______________________
1.1: The Basic Problem in Economics						   Date_______________ Hour____

1. List the Factors of Production.

2. 	Give examples of the Factors of Production.

3. What is the basic problem of economics?

4. What is Economics primarily concerned with?

5. What is Entrepreneurship?

6. 	A situation in which people do not have enough resources to satisfy their every desire.

7.	 Land, labor, capital and entrepreneurship are known as this.

8. This is the study of how individuals, families, businesses, and societies use limited resources to fulfill their unlimited wants.

9. Activities done for a fee are known as this.

10. Manufactured goods used to make other goods and services are known as this.

11. The work people do is known as __________________________________.

12. This is the branch of economic theory dealing with behavior and decision making of small units such as individuals and firms.

13. Tangible items that people buy are _____________________________________________.

14. Making new products and starting new businesses in order to make profits is _________________________.

15. This is the branch of economic theory dealing with the economy as a whole and behavior and decision making by large units.

16. Any use of land, labor, and capital that produces goods and services more efficiently is ______________________________.

17. 	This is the amount of output that results from a given level of inputs.

Ch. 1.2: Trade-Offs

18. 	The value of the next best alternative that is given up is known as this.

19. 	What does a production possibilities curve help determine?

20. 	Study the graph on the back. What is the opportunity cost of producing $7 billion in military goods?
    What is the opportunity cost of producing $8 billion in civilian goods?

21. 	Use the graph below. If two gallons of red paint are made how many gallons of blue paint can be made? 

22. 	The sacrificing of one good or service to purchase or produce another is a ____________________________.

23. 	This is a graph showing the maximum combination of goods and services that can be produced from a fixed amount of
     resources.

Ch. 1.3: What Economists Do?

24. 	Why do economists build economic models?

25. 	This is a visual representation that helps explain and predict economic behavior.

26. 	This is the production and distribution of goods and services in a society.

27. 	A theory that helps explain and predict economic behavior in the real world is known as this.

28. 	This is an assumption involving two or more variables that must be tested for validity.