2. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. market economy; 2. capital; 3. scarce; 4 opportunity cost; _____manufactured goods used to make other goods and services. _____an economy in which decisions of individual producers and consumers largely determine what, how and for whom to produce, with little government involvement in the decisions. _____the real cost of an item: what you must give up in order to get it. _____in short supply; a resource is scarce when there is not enough of the resource available to satisfy all the various ways a society wants to use it

3. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. market economy; 2. capital; 3. scarce; 4 opportunity cost; __2__manufactured goods used to make other goods and services. __1__an economy in which decisions of individual producers and consumers largely determine what, how and for whom to produce, with little government involvement in the decisions. __4__the real cost of an item: what you must give up in order to get it. __3__in short supply; a resource is scarce when there is not enough of the resource available to satisfy all the various ways a society wants to use it

4. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. microeconomics; 2. macroeconomics; 3. positive economics; 4. normative economics; _____the branch of economic analysis that makes prescriptions about the way the economy should work. _____the branch of economic analysis that describes the way the economy actually works. _____the branch of economics that is concerned with the overall ups and downs in the economy. _____the branch of economics that studies how people make decisions and how those decisions interact.

5. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. microeconomics; 2. macroeconomics; 3. positive economics; 4. normative economics; __4__the branch of economic analysis that makes prescriptions about the way the economy should work. __3__the branch of economic analysis that describes the way the economy actually works. __2__the branch of economics that is concerned with the overall ups and downs in the economy. __1__the branch of economics that studies how people make decisions and how those decisions interact.

6. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. business cycle; 2. depression; 3. recessions; 4. unemployment; _____the short-run alternation between economic downturns, known as recessions, and economic upturns, known as expansions. _____a very deep and prolonged downturn. _____a period of economic downturn when output and unemployment are falling; also referred to as a contraction. _____the total number of people who are actively looking for work but aren’t currently employed.

7. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. business cycle; 2. depression; 3. recessions; 4. unemployment; __1__the short-run alternation between economic downturns, known as recessions, and economic upturns, known as expansions. __2__a very deep and prolonged downturn. __3__a period of economic downturn when output and unemployment are falling; also referred to as a contraction. __4__the total number of people who are actively looking for work but aren’t currently employed.

8. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. labor force; 2. unemployment rate; 3. output; 4. inflation; _____the amount of goods and services produced. _____the number of people who are either actively employed for pay or unemployed and actively looking for work; the sum of employment and unemployment. _____a rise in the overall price level. _____the percentage of the total number of people in the labor force who are unemployed, calculated as unemployment/(unemployment + employment).

9. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. labor force; 2. unemployment rate; 3. output; 4. inflation; __3__the amount of goods and services produced. __1___the number of people who are either actively employed for pay or unemployed and actively looking for work; the sum of employment and unemployment. __4__a rise in the overall price level. __2__the percentage of the total number of people in the labor force who are unemployed, calculated as unemployment/(unemployment + employment).

10. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. economic growth; 2. trade-off; 3. production possibilities curve; 4. gains from trade; _____an increase in the maximum amount of goods and services an economy can produce. _____An economic principle that states that by dividing tasks and trading, people can get more of what they want through trade than they could if they tried to be self-sufficient. _____when you give up something in order to have something else. _____shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced. It illustrates the trade- offs facing an economy that produces only two goods.

11. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. economic growth; 2. trade-off; 3. production possibilities curve; 4. gains from trade; __1__an increase in the maximum amount of goods and services an economy can produce. __4__An economic principle that states that by dividing tasks and trading, people can get more of what they want through trade than they could if they tried to be self-sufficient. __2__when you give up something in order to have something else. __3__shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced. It illustrates the trade- offs facing an economy that produces only two goods.

12. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. demand curve; 2. change in demand; 3. movement along the demand curve; 4. substitutes; _____pairs of goods for which a rise in the price of one of the goods leads to an increase in the demand for the other good. _____a change in the quantity demanded of a good that results from a change in the price of that good. _____a shift of the demand curve, which changes the quantity demanded at any given price. _____a graphical representation of the demand schedule, showing the relationship between quantity demanded and price.

13. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. demand curve; 2. change in demand; 3. movement along the demand curve; 4. substitutes; __4__pairs of goods for which a rise in the price of one of the goods leads to an increase in the demand for the other good. __3__a change in the quantity demanded of a good that results from a change in the price of that good. __2__a shift of the demand curve, which changes the quantity demanded at any given price. __1__a graphical representation of the demand schedule, showing the relationship between quantity demanded and price.

14. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. complements; 2. normal good; 3. inferior good; 4. supply curve; _____a good for which a rise in income decreases the demand for the good. _____a graphical representation of the supply schedule, showing the relationship between quantity supplied and price. _____pairs of goods for which a rise in the price of one good leads to a decrease in the demand for the other good. _____a good for which a rise in income increases the demand for that good—the “normal” case.

15. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. complements; 2. normal good; 3. inferior good; 4. supply curve; __3__a good for which a rise in income decreases the demand for the good. __4__a graphical representation of the supply schedule, showing the relationship between quantity supplied and price. __1__pairs of goods for which a rise in the price of one good leads to a decrease in the demand for the other good. __2__a good for which a rise in income increases the demand for that good—the “normal” case.

16. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. change in supply; 2. movements along the supply curve; 3. input; 4. equilibrium; _____a shift of the supply curve, which changes the quantity supplied at any given price. _____a change in the quantity supplied of a good that results from a change in the price of that good. _____a good or service used to produce another good or service. _____an economic situation in which no individual would be better off doing something different.

17. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. change in supply; 2. movements along the supply curve; 3. input; 4. equilibrium; __1__a shift of the supply curve, which changes the quantity supplied at any given price. __2__a change in the quantity supplied of a good that results from a change in the price of that good. __3__a good or service used to produce another good or service. __4__an economic situation in which no individual would be better off doing something different.

18. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. equilibrium price; 2. equilibrium quantity; 3. surplus; 4. shortage; _____the price at which the market is in equilibrium, that is, the quantity of a good or service demanded equals the quantity of that good or service supplied; also referred to as the market-clearing price. _____the quantity of a good or service bought and sold at the equilibrium (or market-clearing) price. _____the excess of a good or service that occurs when the quantity supplied exceeds the quantity demanded; surpluses occur when the price is above the equilibrium price. _____the insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied; shortages occur when the price is below the equilibrium price.

19. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. equilibrium price; 2. equilibrium quantity; 3. surplus; 4. shortage; __1__the price at which the market is in equilibrium, that is, the quantity of a good or service demanded equals the quantity of that good or service supplied; also referred to as the market-clearing price. __2__the quantity of a good or service bought and sold at the equilibrium (or market-clearing) price. __3__the excess of a good or service that occurs when the quantity supplied exceeds the quantity demanded; surpluses occur when the price is above the equilibrium price. __4__the insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied; shortages occur when the price is below the equilibrium price.

20. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. deadweight loss; 2. inefficient allocation to consumers; 3. price floor; 4. price ceilings; _____losses associated with quantities of output that are greater than or less than the efficient level, as can result from market intervention such as taxes, or from externalities such as pollution. _____the maximum price sellers are allowed to charge for a good or service; a form of price control. _____a form of inefficiency in which sellers who would be willing to sell a good at the lowest price are not always those who actually manage to sell it; often the result of a price floor. _____the minimum price buyers are required to pay for a good or service; a form of price control.

21. Mr. Weiss Test 1 – Sections 1 & 2 – Vocabulary Review 1. deadweight loss; 2. inefficient allocation to consumers; 3. price floor; 4. price ceilings; __1__losses associated with quantities of output that are greater than or less than the efficient level, as can result from market intervention such as taxes, or from externalities such as pollution. __4__the maximum price sellers are allowed to charge for a good or service; a form of price control. __2__a form of inefficiency in which sellers who would be willing to sell a good at the lowest price are not always those who actually manage to sell it; often the result of a price floor. __3__the minimum price buyers are required to pay for a good or service; a form of price control.