Unit 1A Vocabulary

Front

What is the term for the limited nature of society's resources?

Back

Scarcity

Answer explanation

The term 'scarcity' refers to the limited nature of society's resources, indicating that there are not enough resources to meet all human wants and needs. This distinguishes it from 'shortage', 'abundance', and 'surplus'.

Front

What does it mean to distribute resources or duties for a particular purpose?

Back

Allocate

Answer explanation

To distribute resources or duties for a particular purpose means to allocate them. This involves assigning or designating resources effectively, unlike hoarding, wasting, or ignoring them.

Front

Which of the following is NOT considered a factor of production? Land, Labor, Money, Capital

Back

Money

Answer explanation

Money is not considered a factor of production. The main factors are land, labor, and capital, which are used to produce goods and services, while money is a medium of exchange.

Front

What are resources that occur naturally and are used in the production of goods and services?

Back

Natural Resources

Answer explanation

Natural resources are materials that occur in nature and are essential for producing goods and services, such as water, minerals, and forests. They differ from human, manufactured, and financial resources, which are not naturally occurring.

Front

What term describes the skills, knowledge, and experience possessed by an individual or population?

Back

Human Capital

Answer explanation

The term 'Human Capital' refers to the skills, knowledge, and experience that individuals or populations possess, distinguishing it from other types of capital like physical, natural, or financial capital.

Front

Who is a person that organizes and operates a business, taking on greater than normal financial risks?

Back

Entrepreneur

Answer explanation

An entrepreneur is someone who organizes and operates a business, often taking on significant financial risks to do so. This distinguishes them from managers, employees, and investors, who do not typically bear the same level of risk.

Front

What is the financial gain made in a transaction?

Back

Profit

Answer explanation

The financial gain made in a transaction is referred to as profit. Profit is the difference between revenue and expenses, indicating the amount earned after costs are deducted.

Front

What is the cost of the next best alternative foregone when making a decision?

Back

Opportunity Cost

Answer explanation

Opportunity cost refers to the value of the next best alternative that is forgone when making a decision. It highlights the trade-offs involved in choosing one option over another.

Front

What is the additional cost incurred from producing one more unit of a good or service?

Back

Marginal Cost

Answer explanation

The additional cost incurred from producing one more unit is known as Marginal Cost. It specifically measures the change in total cost when production is increased by one unit, making it the correct choice.

Front

What is the additional benefit received from consuming one more unit of a good or service?

Back

Marginal Benefit

Answer explanation

The additional benefit from consuming one more unit of a good or service is known as Marginal Benefit. It measures the extra satisfaction or utility gained, distinguishing it from Total or Average Benefit.